Main Steps in Settling an Estate

Altrendo images / Getty images

When a person dies, someone must settle that person’s affairs. The person who settles these affairs is commonly called the executor. But the official term in Quebec law is liquidator.

The property of a dead person, plus amounts owed to or owed by that person, are often called the "estate." But the official term in Quebec law for an estate is “succession.”

The liquidator must follow certain steps when settling an estate, and manage the deceased’s property in the interest of the people who will inherit.

This article will help liquidators with this process, which is sometimes long and complex.

 

Step 1: Get proof of death.

The death of a person can be proved by a "copy of an act of death" or a death certificate.The Directeur de l’état civil (registrar of civil status) of Quebec can provide these documents.The liquidator will need one or both of these documents, depending on the information requested by the people the liquidator will have to deal with.

Liquidators can ask for these documents online on the website of the Directeur de l’état civil du Québec.

Important! An "attestation of death" prepared by a doctor or a "declaration of death" prepared by a funeral director are not the right documents for settling an estate.

 

Step 2: Do a will search.

The liquidator must do a search to find the last will of the person who died.

Two separate searches must be done: first, a search of the registry of wills of the Chambre des notaires du Québec (professional order for notaries - website in French only) and second, a search of the registry of wills of the Barreau du Québec (professional order for lawyers).

The liquidator must also look through the deceased’s papers for a will not made by a notary or a lawyer (that is, a holograph will or a will made in front of witnesses.) If the deceased made more than one will, the liquidator must use the most recent will to settle the estate. A search of the deceased’s papers is necessary even if a will was found in one of the registries of wills.

The liquidator must also check whether the deceased had a marriage contract or a contract of civil union. If there is one, the liquidator must check whether the contract contained a gift to take effect when the deceased dies (for example, a surviving spouse clause).   

If the liquidator doesn’t find a will or a gift to take effect on death, the law decides who inherits the deceased’s property. To learn more, read our article Dying Without a Will.

 

Step 3: Probate wills not made by a notary.

If the will is a holograph will, or a will made in front of witnesses, it must be probated. Probate is a procedure done by a court or a notary to confirm that the document is the deceased’s last will and that it follows all legal requirements.

Note: A will made by a notary does not have to be probated.

 

Step 4: Publish a notice of designation of liquidator.

The person who accepts to act as liquidator of an estate must publish a notice called a “notice of designation of liquidator.” It is published in the government register of personal and movable real rights (Website in french only), sometimes known by its abbreviation RDPRM. If the estate of the deceased has real estate (house, condo, commercial building, etc.), the liquidator must also publish a notice in the government land register (Registre foncier) (website in French only).

The purpose of these notices is to notify the public of the liquidator’s identity and right to manage the property belonging to the estate.

 

Step 5: Identify and contact the heirs.

The liquidator must identify and contact all potential heirs. An heir is someone who accepts, or is legally obliged to accept, an estate or part of an estate.

The heirs are usually named in the will.

If there is no will, the law decides who inherits. To learn more, read our article Dying Without a Will

 

Step 6: Close the deceased’s accounts and open an estate account.

When a person dies, financial institutions such as banks freeze the deceased’s accounts. So it’s best to close the accounts and transfer the money to a new account opened in the name of the estate.

The estate account is used for these things:

  • for money transferred from the deceased’s accounts
  • for money received after the death
  • to pay the deceased’s debts

To open an estate account, the liquidator needs certain documents, such as these:

  • the certificate or act of death issued by the Directeur de l’état civil du Québec (registrar of civil status)
  • results of the will search of the registry of wills of the Chambre des notaires and the Barreau du Québec
  • a copy of the will

 

Step 7: Make a list of the property and debts of the deceased and publish notices.

The liquidator must make an "inventory" (list) of the deceased’s property (houses, cars, bank accounts, RRSPs, etc.) and debts (mortgage and other loans, bills, etc.). The liquidator signs the inventory in front of a notary or two witnesses.

The liquidator then publishes a notice called “closure of the inventory.” It is published in the register of personal and movable real rights (RDPRM) (Website in french only) and in a newspaper distributed in the area where the deceased was living at the time of death. The notice confirms that an inventory was made.

Important! Some people can claim amounts of money from the estate even though they are not named in the will. For example, the deceased’s married spouse might have a right to a compensatory allowance, and the children might be entitled to child support.

These amounts are debts of the estate. The liquidator must include them in the inventory of the deceased’s property and debts.

The liquidator can consult a notary or a lawyer to determine these amounts.

Did You Know? The liquidator can ask to not have to make an inventory. But not making an inventory can have some serious consequences. Consult a legal professional to learn more. 

 

Step 8: File tax returns and get tax certificates.

After death, both the deceased AND the estate are taxed. The liquidator must file these tax returns:

  • the deceased’s federal and Quebec income tax returns for the year of death
  • any income tax returns for previous years that the deceased did not file
  • federal and Quebec income tax returns for the estate declaring all amounts received and paid out after the death

These tax returns must be sent to the federal and provincial governments with the required notices and documents. The liquidator must make sure that any money owing is paid.

The liquidator must obtain the certificates authorizing the distribution of the property to the heirs. These tax certificates are proof that the deceased does not owe any money to either government.

The certificate issued by the federal government is called a Clearance Certificate. The certificate issued by the Quebec government is called a Certificate Authorizing the Distribution of Property.

Important! Liquidators who distribute estate property to the heirs before receiving the tax certificates might have to personally pay any taxes owing.

 

Step 9: Pay the debts.

When it’s time to pay amounts owed, one of three situations can arise:

1.       There’s enough money in the estate to pay all amounts owed.

If so, the liquidator must pay

  • the debts of the deceased (e.g., electricity bills, mortgage loans, taxes),
  • the debts of the estate (e.g., funeral expenses, notarial fees, taxes), and
  • the property the deceased clearly identified and left to a specific person (e.g., “I leave $5,000 to my friend Peter”).

 2.       There is not enough money in the estate to pay all amounts owed, but there is enough property. 

In this case, the liquidator can sell the estate property to pay the amounts owed after getting any permission needed.

 3.       There is not enough money or property to cover all amounts owed.

In this situation, the liquidator must wait before paying any amounts owed. It is strongly recommended to consult a notary or a lawyer.

For more information, read our article Settling an Estate.

 

Step 10: Give a final report to the heirs and distribute the property.

The liquidator gives the heirs a final report, officially called a “final account.” This is a report by the liquidator that tells the heirs what was left in the estate after paying all amounts owed. It also explains what went on during the liquidation.

The liquidator can include a partition proposal with the final account. A partition proposal is a plan for how the property left in the estate will be divided among the heirs. The heirs are free to accept or refuse the proposal.

  • If they accept, the liquidator divides the remaining property according to the proposal and is released from further duties.
  • If they refuse the final account and the partition proposal, the matter must be brought before the court.
     

Step 11: Publish a notice confirming the estate has been settled.

Once all the property has been distributed, the liquidator publishes a notice of closure confirming the estate has been settled. The notice is published in the register of personal and movable real rights (RDPRM). 

Important !
This article explains in a general way the law that applies in Quebec. This article is not a legal opinion or legal advice. To find out the specific rules for your situation, consult a lawyer or notary.