The role of the liquidator

Also known as the executor of a will, the liquidator is the person in charge of settling the estate of a loved one after his or her death. He or she plays a key role in the smooth liquidation of the deceased’s assets. So, what is the role of the estate liquidator? How do you choose a qualified person capable of carrying out this task? Find out what you need to consider before appointing your future estate liquidator.

What are the rights and obligations of an estate liquidator?

The liquidator oversees the estate, but what duties and rights does this position entail?

The liquidator’s rights

The liquidator’s rights are set out in the will. If the will is silent, the liquidator administers the estate ‘s assets until they are distributed to the heirs. Assets that are perishable, difficult to preserve or losing value can only be sold if the will so states, and with the unanimous agreement of the heirs.

The liquidator is entitled to financial compensation for his services. His remuneration is taxable income and ranges from 1 to 5% of the deceased’s estate assets. Pricing is also based on several other factors:

• • the complexity of the work set out in the will;

• • the gross value of theinheritance;

• • the liquidator’s powers;

• • the time required to carry out the various tasks;

• • the specialized knowledge required for estate liquidation.

It is in the testator’s interest to specify the amount of remuneration in the will, in order to avoid conflicts and reduce the liquidator’s tax burden. In the absence of a testamentary fee schedule, it is up to the heirs to set the amount. In the event of disagreement, the final decision rests with the court.

Obligations of the liquidator

To ensure that the liquidation process runs smoothly, the law imposes a series ofobligations on the liquidator. He must demonstrate honesty, prudence and respect for the deceased’s last wishes.

The liquidator undertakes to make reasonable decisions, administer the estate and manage the liquidation in accordance with the deceased’s wishes. He communicates essential information to the heirs.

The liquidator participates in funeral arrangements. He or she gathers together the deceased’s important documents: tax returns, will, etc. He or she lists the deceased’s assets, in this case financial assets, personal property and material goods.

Failure to comply with these obligations may result in conviction. To denounce his actions, the interested parties (the co-litigator, the heir or a close family member of the deceased) apply to the court. They claim compensation for the damage they have suffered and request that the liquidator be replaced.

The duties of the liquidator

The estate liquidator has several responsibilities:

• • drawing up an inventory of assets ;

• • publish its designation with the Registre des Droits Personnels et Réels Mobiliers (RDPRM);

• • collect sums due;

• • publish a notice of inventory closing in the RDPRM and in the deceased’s local newspaper;

• • pay the estate’s debts;

• • open a bank account in the name of the estate;

• • pay taxes;

• • deliver bequests;

• • identify heirs;

• • distribute assets to heirs;

• • produce a final account;

• • consult an expert to limit legal liability if the deceased has more inheritance liabilities (debts) thaninheritance assets (material goods);

• • publish the account closure in the RDPRM.

Throughout the performance of his duties, the liquidator retains his rights. There is no time limit on the liquidator’s obligations. However, if he takes more than a year to complete his tasks, he will have to account for his administration to the heirs, legatees by particular title and unpaid creditors.

How do you choose an estate liquidator?

The testator may designate any liquidator in his or her will. Failing this, the task falls to the heirs.

Who can be an estate liquidator?

The role of liquidator cannot be assigned to just anyone. The person appointed must be of full age and capable. In theory, a minor who is married or has been emancipated by court order can take on the role. Nevertheless, this choice seems difficult given the extent of the responsibilities involved.

Sometimes, the notary, who is also responsible for drawing up the will, takes on the role of liquidator. In this case, he or she can no longer receive remuneration as liquidator. In addition to the notary, other legal experts can play this role: an accountant, a lawyer specialized in inheritancelaw… Heirs can also turn to asavings company or a trust company registered with theAutorité des marchés financiers. In addition, an heir or relative of the deceased appointed as liquidator can call on their services in the succession process.

What are the criteria for choosing an estate liquidator?

The appointment of a liquidator takes into account several criteria:

• • qualifications ;

• • maturity ;

• • availability;

• • its location;

• • its integrity.

Some tasks are complex without basic knowledge. For example, knowledge of legal aspects, taxation and inheritance law is desirable. Nevertheless, the person entrusted with the task may seek the assistance of an expert.

Maturity is a fundamental criterion, given the many responsibilities involved. A person who is too young lacks experience in the legal field, while one who is too old can no longer fully assume the duties of liquidator.

Make sure you appoint a person who is available to carry out tax-related tasks, and to meet the key players in the liquidation process (creditors, heirs, relatives of the deceased, etc.).

The liquidator must have unrestricted access to the deceased’s documents, and must therefore make several trips (to government agencies, financial institutions, etc.). Choose someone close to your home.

The liquidator may be called upon to arbitrate conflicts between heirs to the estate. He or she must therefore be impartial and objective in his or her decisions.

Skills required to be an estate liquidator

The skills required to be an estate liquidator depend on the complexity of the deceased’s estate. As a general rule, the liquidator does not need to have a specific set of skills. However, an estate consisting of several material or financial assets can be difficult to administer. The deceased’s assets may also be the subject of a sale, which requires commercial knowledge.

If your estate is difficult to manage, you should consult an estate lawyer or notary. However, notary fees can add to the cost, in addition to inheritance fees.

Mistakes to avoid when choosing an estate liquidator

Choosing a person who is geographically remote is a fatal mistake. Settling an estate from a distance can cause considerable delays.

An elderly liquidator becomes problematic, given the effort required to manage the estate.

The choice should not be made in haste. The duties of an executor require a person you can trust. That’s why some testators choose a family member. Others entrust the task to a legal expert.

Before confirming your choice, ask the designated person for his or her opinion. Make sure they are aware of the scope of their responsibilities, the knowledge required and the risks involved.

Can I renounce my role as liquidator of an estate?

The role of liquidator of an estate is limited to the transfer and sale of the deceased’s assets and the repayment of his debts. Is a person mandated to carry out the mission in a position to refuse?

Is it possible to refuse the role of liquidator of an estate?

The person chosen by the testator himself may refuse the proposal and renounce the role of liquidator. However, he or she must inform the co-liquidators or his or her replacement of this decision (if the will provides for a replacement). In the absence of a replacement, the heirs must appoint another liquidator by unanimous vote. In the event of disagreement over the appointment, they must refer the matter to the court.

However, there is one exception to this rule. If the deceased has only one heir, he must accept the office. He can consult a lawyer or notary to help him.

How do I resign as liquidator of an estate?

The liquidator may resign at any time. However, resignation is impossible if he or she is the sole heir to the estate. It is also not possible if it compromises the liquidation process.

Resignation procedures are set out in the will. If the document makes no mention of this, the resigning liquidator informs his decision in writing.

Even so, the liquidator has a duty to report to the heirs on his or her management of the estate throughout the period in which he or she is liquidator.

Conclusion

For several reasons, the choice of the executor plays a key role in the will. The person appointed carries out the testator’s last wishes. He or she must be fully prepared to take on the task of managing the deceased’s estate, going through the various stages of the succession and planning for a lengthy process that can last several months. However, there is no law prohibiting the assistance of an inheritance lawyer to help her through the process.

Source: https://www.quebec.ca/justice-et-etat-civil/testament-succession/testament/avant/liquidateur-testamentaire