Show me the money!… When can I receive my inheritance?

Show me the money!… When can I receive my inheritance?

  1. Are you a Liquidator?
  2. I want to accept my role as Liquidator-What do I do?
  3. How do I make an inventory and render an accounting of the assets, debts and expenses? 
  4. I want to renounce my role as Liquidator-What do I do?
  5. How do I know if the Estate is Solvent?
  6. Are you an heir?
  7. Can I receive a partial or advance payment from the Estate? 
  8. Payment of debts and particular legatees
  9. What do I do if the Estate is insolvent? 
  10. Duties of Liquidator of an insolvent estate
  11. Payment of debts towards creditors of an insolvent estate

Picture the following scenario: The last will and testament of the deceased has been read and you have received a copy of the will searches from both the Chambre des notaires and the Barreau du Québec. You learn that the deceased has appointed you as an heir to his estate.

The question now becomes:  When will I receive my money and how?

It is prudent to ensure that you speak with the liquidator of the estate to ensure that the liquidator fulfills their role.

  1. Are you a Liquidator?

The liquidator is the person in charge of administering a deceased’s succession. Their main function is to collect the assets, make an inventory, pay off debts, deliver the bequests by particular title, protect the property, and properly allocate the remaining assets (of a solvent succession) to the beneficiaries (heirs) of the estate, the while respecting the wishes of the deceased.

For more information on the role of a liquidator, please visit : https://schneiderlegal.com/the-role-of-the-liquidator/

  1. I wish to accept my role as Liquidator-What do I do?

If you have been assigned the role of liquidator, and you wish to accept your role, please be aware of the following basic formalities:

  • Publish you title as liquidator in the Personal, Real and Movable Rights Register (RDPRM),
  • Produce a proper rendering of account, and
  • Publish the closing of the inventory at the RDPRM.

As liquidator, you are bound by a duty of loyalty, integrity, and must act in the best interests of the estate pursuant to certain rules under the Civil Code of Québec.

Upon publishing your title as liquidator, the next important step is to ensure the preparation of the inventory and provide yearly accounts of your administration should it last over a year.

For additional information regarding the role of a liquidator please visit : https://schneiderlegal.com/the-role-of-the-liquidator/.

For additional information regarding the responsibilities of a liquidator, please visit : https://schneiderlegal.com/the-role-of-the-liquidator/responsibilities-of-the-liquidator/

  1. Rendering of Account and Inventory

Article 1326  C.c.Q states:

an administrator bound to make an inventory shall include in it a faithful and exact enumeration of all the property entrusted to his administration or constituting the administered patrimony.

Such an inventory contains the following in particular:

(1)   the description of the immovables, and a description of the movables, with indication of their value and, in the case of a universality of movable property, sufficient identification of the universality;

(2)  a description of the currency in cash and other securities;

(3)  a listing of valuable documents.

It also contains a statement of liabilities and concludes with a recapitulation of assets and liabilities.

The inventory is made either by notarial act en minute, or by private writing before two witnesses. In the latter case, the author and the witnesses sign it and indicate the date and place of execution[1].

Please note that the liquidator must also produce an annual account (at least once a year) with an updated statement, if the settling of the estate takes longer than a year[2].

 

Here is an example of an estate inventory:

Click here to download an example spreadsheet

If you do not know the assets and expenses of the inventory of the estate, please see the attached estate liquidation form that serves as a guide for filling out the inventory:

Estate liquidation form: https://schneiderlegal.com/estate-liquidation-form/

Once you have completed the inventory form, you can prepare the inventory.

  1. I wish to renounce my role as Liquidator-What do I do?

If you have been assigned the role of liquidator and do not wish to fulfill your role, be it that you feel the task is too burdensome or due to an insolvent estate, it is your right to refuse your role. For these reasons, it is strongly recommended to obtain a renunciation of your role as liquidator that will be notarized by a notary[3].

For additional information, please visit : https://schneiderlegal.com/the-role-of-the-liquidator/renunciation-of-the-role-of-liquidator/.

  1. Are You an Heir?

An heir is a person legally entitled to the property or rank of another on that person’s death and it is your choice whether to accept the title of being an heir or to refuse it.

A successor has six months from the day his right arises to deliberate and exercise his option. The period is extended, by operation of law, by as many days as necessary to afford him 60 days from the closure of the inventory.

During the period for deliberation, no judgment may be rendered against the successor as an heir unless he has already accepted the succession.[4].

Moreover, if a successor aware of his heirship does not renounce within the period for deliberation, he is presumed to have accepted unless the period has been extended by the court. If a successor is unaware of his heirship, he may be compelled to exercise his option within the time determined by the court. If a successor does not exercise his option within the time determined by the court, he is presumed to have renounced[5].

The formalities for renunciation consist of an express disavowal made by notarial act en minute or by a judicial declaration which is recorded[6].

  1. Is the Estate Solvent?

When the estate of the deceased is sufficient for the acquittal of all his debts, the succession is said to be solvent. In this case, special rules apply to distribute the deceased’s assets.

  1. Can I receive a partial or advance payment from the Estate?

Pursuant to C.C.Q. article 807 states the following:

When the succession is manifestly solvent, the liquidator, after ascertaining that all the creditors and legatees by particular title can be paid, may pay advances to the creditors of support and to the heirs and legatees by particular title of sums of money. The advances are imputed to the shares of those who receive them.

Indeed, it is important to note the word may does not refer to an obligation, but rather to an option. An important case, Gaetano v. Gaetano won by the firm mirrors this exact scenario[7].

In Gaetano c. Gaetano[8], the court stipulates: “Art. 807 C.c.Q. gives the liquidator the discretion to issue an advance but not the obligation to do so. […] a liquidator has no duty to provide an advance.”

Mr. Gaetano, the father of the parties, passed away in April 2015. His successors (heirs), his two (2) daughters and son, were each to receive one third of his estate.

The Plaintiff alleged that her sister was taking too long to communicate certain documents and information she is entitled to as an heir as well as the information regarding the content of the inventory of the estate.

Moreover, the value of the estate had decreased considerably since the first inventory performed back done in October of 2015.

Plaintiff was seeking a safeguard order to obtain an advance of 100,000$ on her share of the inheritance and the disclosure and communication of financial documents forming part of the estate, namely the deed of sale of the assets of her father’s company and its financial statements.

The Superior Court decision concluded that under article 1354 of the Civil Code of Quebec, Plaintiff is entitled to obtain a communication and a copy of the documents relating to the administration of the estate from the liquidator-sister without the need to request a safeguard order.

The court also construed that article 807 of the C.C.Q. does not require the liquidator to pay an advance to the heirs.

In the present matter at hand, the Defendant was not refusing to pay an advance payment to Plaintiff, but rather Defendant requested that Plaintiff justify her health problems to cover medical bills and expenses and the causal link to prove a financial strain in order to justify an advance payment.

The court concurred that it is not reasonable to impose such conditions and that the liquidator improperly exercised her discretion.

Notwithstanding the discretionary nature of the liquidator’s power to make an advance payment to the heirs, in the given circumstances, Plaintiff meets the appearance of a legal right to obtain said advance payment.

Her financial situation is increasingly precarious and there is an urgent need for action, particularly to ensure that she can pay for the medication required.

In fact, Plaintiff could suffer irreparable harm if she were not granted this advance.

In sum, the four (4) criteria for a safeguard order was met in favor of Plaintiff.

Finally, even if the criteria of the safeguard order were not met, the court has the discretion, under section 49 of the Code of Civil Procedure, to make any appropriate order, such as ordering an advance payment to an heir.

Since the estate of Mr. Gaetano is clearly solvent, the court ordered the liquidator to pay the Plaintiff $75,000.

For more information on the Gaetano case, you may access the full judgement at the following link : https://schneiderlegal.com/wp-content/uploads/2018/02/Gaetano-vs-Gaetano-Transcription-15-janvier-2018.pdf

  1. Payment of Debts and Legatees

If the property of the estate is sufficient to pay all the creditors and all the legatees by particular title and if provision is made to pay the claims that are the subject of proceedings, the liquidator pays the known creditors and known legatees by particular title as and when they present themselves.

The liquidator pays the ordinary public utility bills and pays the outstanding debts as and when they become due or according to the agreed terms and conditions[9].

  1. Is the Estate Insolvent?

An estate is insolvent when the deceased’s assets are insufficient to pay all debts. Knowing this, if you have been assigned the title of liquidator, you may accept the role of office, or renounce to it.

  1. Duties as a Liquidator of an Insolvent Estate

If you have decided to accept your role as liquidator according to the wishes of the deceased, you must make an inventory of the debts to be paid by the estate, as well as a payment proposal that he will present to the heirs, creditors and legatees. This proposal not only presents the estate’s assets as assessed in the inventory, but also presents the changes in composition that have occurred since then.

  1. Payment Proposal of an Insolvent Estate

The payment proposal is a written document whose purpose is to present in a logical form the order in which the liquidator intends to pay the deceased’s claims. It establishes an order of collocation as well as strategies, if applicable, for specific legacy reductions. An example of a technique to reduce legacies by particular title is the sale of property at a below market price in order to pay off debts more quickly.

The liquidator must obtain the homologation of the payment proposal by the court, which contains a provision for a reserve, if appropriate, for the payment of any potential judgement. Homologation is a legal act that is subordinated to the law by a compliance control entrusted to an authority such as the court.

  1. Payment of Debts Towards Creditors of an Insolvent Estate

The liquidator must make payments of the debts according to the homologated payment. The liquidator can fulfil his obligation to pay debts through two (2) means:

  • Proceed to the sale of the goods, even at under-market value in order to pay off debts as quickly as possible; and
  • In the case of individualized property, such as real estate, the liquidator may request its alienation, or in the case where the legatee wishes to retain title to the said property, he may pay the equivalent of its value in order to enable the liquidator to satisfy the other claims.
  1. Payment to Particular Legatees

If there is an insolvency with respect to legatees, it would mean that the deceased’s assets are sufficient to pay off the debts, but insufficient to satisfy all legatees.

Therefore, the liquidator must follow the order of collocation payment established as follows:

  • Legatees by particular title who have a preference under the deceased’s will;
  • Legatees by particular title of an individual property;
  • Other legatees by particular title, i. e. normally legatees of sums of money, who receive their legacies proportionally on the residue of the succession[10].

[1] C.c.Q., art. 1367

[2] C.c.Q., art. 1351 et ss.

[3] https://schneiderlegal.com/the-role-of-the-liquidator/renunciation-of-the-role-of-liquidator/

[4] C.c.Q., art. 632.

[5] C.c.Q., art. 633.

[6] C.c.Q., art. 646.

[7] 2018 QCCS 79.

[8] 2018 QCCS 79.

[9] C.c.Q., art. 808.

[10] C.c.Q., art. 808-818.

If you are looking for a law firm with reasonable rates, quick and efficient turnaround time for your files and who provides personalized and effective follow-ups, call Schneider Attorneys at (514) 439-1322 ext. 112 or email us at info@schneideravocat.com

The above noted text should not be construed as providing legal advice or a statement of your claim. The process highlighted above are merely parameters and barometers and do not constitute any warranties and guaranties with regards to your file at hand. We strongly recommend that you seek legal advice with a licensed attorney from the Barreau du Quebec or a notary at the Chambre des Notaires. Each case must be seen and analysed on its merits as the legal process may be complex and cumbersome.

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