You are the executor or heir of an insolvent estate, as the assets of the estate are insufficient to pay off all debts and distribute specific legacies to the legatees. Therefore, you will need to make one of the following choices:
If the heirs do not want or cannot renounce the estate due, among other reasons, to the following:
In such circumstances, the heirs can ask the executor to proceed with the liquidation of the estate, while complying with each step provided for in the Civil Code of Québec. In order for the heirs' liability for the deceased person's debts to be limited to the value of the assets they would receive, the executor must, among other things,
The executor who must liquidate an insolvent estate does not have greater responsibility than the executor of a solvent estate, meaning that both must comply with the rules of the Civil Code of Québec. However, the executor of an insolvent estate will have additional steps to complete, namely:
The liquidation of an insolvent estate is beneficial if there is sufficient equity to make a payment proposal to creditors. Therefore, each insolvent estate case must be analyzed before making a decision regarding the preferred alternative.
It is therefore important to consult Notaire-Direct to respect the rights of creditors and the interests of the heirs.