5 things to know about your entitlement to your share of the estate: debts, creditor support, and advance payments

Settling an estate is not without its challenges as a liquidator must abide by his legal duties to avoid triggering his personal liability for the debts of the deceased. The most important debts, creditor support, and advance payments to acquit are as follows:

  1. 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.

Examples include loans, income tax, rent, etc.

  • 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.

Examples include service providers such as: telephone, internet, electricity, credit cards, etc.

  • The liquidator may alienate movable property that is perishable, likely to depreciate rapidly, or expensive to maintain. The remaining property of the estate may also be alienated upon obtaining the heirs’ consent, or through a court order in the event of a dispute (art. 804, C.C.Q.).
  • When it comes to immovable property, the last will and testament provides specific dispositions granting extensive powers to the liquidator, beyond simple administration. In other words, the liquidator may alienate immovable property in the best interests of the estate, as long as his mandate allows him to do so, in accordance with the last will.
  1. Funeral costs:
  • Expenses such as funeral costs, fees for obtaining the death certificate, and other costs inherent to the estate are also paid out of the deceased’s assets.
  • When applicable, the liquidator must follow the deceased’s wishes in regards to his funeral arrangements.
  1. Taxes:
  • The liquidator is responsible for filing the deceased’s provincial and federal taxes for the years prior to his death if left unaccomplished, but also the tax returns for the year of his death.
  • The deadline for filing said returns and paying any taxes vary depending on the date of death and if the deceased operated a business.
  • For more information on fiscal matters and estates, please consult the Revenu Québec and Canada Revenue Agency websites.
  • Click here for Revenu Québec: https://www.revenuquebec.ca/en/
  • Click here for Canada Revenue Agency: https://www.canada.ca/en/revenue-agency.html
  1. Creditors of support:

In the same manner as any other debt of the estate, the liquidator pays these creditors of support, as follows:

  • Every creditor of support may within six (6) months after the death claim a financial contribution from the estate as support (art. 684, al. 1 C.C.Q.).
  • The liquidator pays the compensatory allowance to the surviving spouse or any other debt resulting from the liquidation of the patrimonial rights of the married or civil union spouses. In accordance with art. 809 C.C.Q.:

a. Support payments,
b. Partition of value of the property accumulated during the marriage or the civil union, and
c. Compensation for work performed during marriage or civil union for the benefit of the deceased.

  • The liquidator also considers the claims made by the children of the deceased regarding support payments (see art. 809 C.C.Q.).
  1. Advances and partial payments:
  • Where the estate 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 their heirs and legatees by particular title of sums of money. The advances are imputed to the shares of those who receive them (art. 807 C.C.Q.).
  • For more information, please visit: https://schneiderlegal.com/2019/04/18/show-me-the-money-when-can-i-receive-my-inheritance/
  • An important case, Gaetano Gaetano won by the firm illustrates this possible scenario.

a.Gaetano highlights the importance of the word choice may, which does not refer to an obligation, but rather to an option.
b. The court construed that article 807 of the C.C.Q. does not require the liquidator to pay an advance to the heirs. In other words, advance payments are subject to the discretionary nature of the liquidator’s power.
c. In the event that there is a refusal in regards to advances and partial payments, you may have rights and recourses before the court.
d. In the Gaetanocase, pursuant to section 49 of the Code of civil procedures, the court ordered an advance payment of $75,000 to an heir, on the basis that the liquidator improperly exercised her discretion.

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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.