Who is the estate liquidator?
The liquidator is the person who is in charge of handling the estate of someone who dies. Often, the will holds a clause naming the liquidator. In the absence of such a clause, the deceased’s heirs automatically become liquidators.
The designated person has the luxury of accepting this responsibility or not. If, however, the will only accounts for a single heir, that person has no choice but to accept.
Whoever accepts to serve as a liquidator must publish a notice of designation to that effect with the Register of Personal and Movable Real Rights.
Certain professionals such as notaries, lawyers and accountants offer estate liquidation services, for a fee, of course.
The notary who drew up the will cannot act as the liquidator unless the liquidation is done free of charge. This caveat was established to avoid conflicts of interest. To find out more about your notary’s roles, read our article.
What are the liquidator’s obligations?
The liquidator must act within the boundaries set out in the will, while respecting the obligations established by law. They must act with caution, diligence, honesty and loyalty.
If the liquidator does not carry out their duties in a reasonable and responsible fashion, any person with a sufficient interest in the estate can bring them before the court.
Properly carrying out the liquidation can be a fastidious process. The law therefore allows liquidators to be paid for their services, directly from the estate. If they are also an heir, however, they cannot receive financial compensation unless it has been expressly stated in the deceased’s will.
As for the expenses brought on by the liquidation itself (publications and notices, travelling expenses, fees to conduct a will search, legal or accounting fees), the liquidator will be reimbursed directly from the estate.
If these responsibilities prove to be too difficult to manage, the liquidator can resign. They should, however, avoid doing so at a time that could hinder the process.
What are the steps of a liquidation?
- The first thing a liquidator must do is obtain a proof of death, consisting of a copy of the death record or a death certificate. These documents can be requested online on the Registrar of Civil Status of Quebec’s website.
- Then comes the delicate task of determining the last will made by the deceased. It can occur that a person draws up many testamentary documents; however, the law dictates that the most recent will is the one that takes precedence.
- The liquidator must therefore carefully go through the deceased’s documents to see if they hold an unedited expression of their last wishes that could be considered a will in the eyes of the law. To find out more about the drafting and specificities of a will, read this article.
- The liquidator then has the will verified. This step does not apply to wills that have been notarized beforehand. The verification procedure takes place before a notary to ensure that the document meets the requirements set out by law in both form and substance.
- The liquidator must identify the people who stand to inherit and inform them that the succession has been opened.
- In order to facilitate the transactions, it’s best to close the deceased’s personal bank accounts and open a new one in the succession’s name.
- Then comes the arduous task of drawing up the inventory of the deceased’s assets (RRSPs, house, furniture) and debts (personal loans, mortgage). This list must be verified and signed, preferably before a notary, or two witnesses.
- The liquidator can then publish a notice of closure of inventory with the Register of Personal and Movable Real Rights.
- Since the deceased and their estate can be taxed, the liquidator must produce the relevant income tax returns and certificates. These will be sent to the federal and provincial government, to support the aforementioned proof of death.You should also read our article to find out more about life insurance.
- Before proceeding to the most important step, the distribution of assets, the liquidator must pay all debts. If there are enough assets and money to do so, they must settle the debts of the deceased as well as those of the estate, along with specific legs (ex. I leave $1,000 to my son-in-law.)
- If there is not enough money, but sufficient assets in the estate, the liquidator must sell these assets. They can then repay the debts mentioned above.
- Lastly, if it is impossible to repay the debts because of a lack of money and assets, the liquidator must call upon the services of a lawyer or notary.
- Once the debts have been settled, they must draw up a summary of the liquidation and distribute the estate’s assets accordingly.
- The notary who drew up the will cannot act as the liquidator unless the liquidation is done free of charge.
- It’s best for the liquidator to close the deceased’s personal bank accounts and open a new one in the succession’s name.
- If needed, the liquidator can call upon the services of a lawyer or notary and pay them directly from the estate.