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  • Peggy Mavroudis

Estate Settlements: What is the process?

Navigating the intricate labyrinth of estate settlements requires more than just legal expertise—it demands a compassionate and methodical approach. As a paralegal immersed in this realm, I've come to understand that behind every estate settlement lies a mosaic of emotions, complexities, and legalities.

From orchestrating the distribution of assets to ensuring the final wishes of the departed are honoured, the journey through estate settlements is as diverse as the individuals it concerns. In this blog, I invite you to delve into the delicate balance between empathy and efficiency that defines our unique approach to estate settlements.

Join me as we unravel the nuances of this process and explore the pivotal role paralegals play in bringing closure and peace to families during their most challenging times.

“Estate Settlement” or “Succession Settlement”, those words get tossed around a lot but what do they mean? What about other related words such as Executor or Liquidator, Estate Inventory, RDPRM, Rendering of Account, Clearance Certificates? What does it all entail? How weighty are the responsibilities and duties of settling an estate? What are all the steps? How long will it take? 

If you are in the industry, these words are part of your everyday jargon. However for most, this world is unknown. 

For anyone who has exercised the daunting task of Estate Liquidator, knows its complexity, lengthy duration, as well as, the legal implications. 

I have settled dozens of estates alongside experienced notaries for almost a decade now.

If you are looking for guided assistance and reassurance from an experienced professional, let’s work together.

What are the first steps? Where to begin? 

The start of a new estate settlement is what I like to call “Discovery”. I will meet with the family onsite and ask a lot of questions and gather information. It’s important to get a feel for the family dynamics and a deep sense of the Deceased’s life. Was the Deceased responsible in regards to their finances? Or were they drowning in debt? And so on and so forth.

The reason I say this is because although many might think that estate settlements are all about numbers, it’s in all actuality extremely personal. You are dealing with people in mourning, inheritances, tense family relations and possible insolvency. Often times you may also uncover surprises along the way, which are rarely positive.

Having an experienced Liquidator that is accessible and compassionate is often what the client is looking for.

Setting things in motion

After the discovery session, we will:

  • Obtain all the legal documents (Will, Will Searches and Death Certificate);

  • Identify and contact the legatees (for the purposes of this blog, we will describe the settlement of an estate in which the Deceased left a Notarial Quebec Will);

  • Retain the services of a CPA experienced in estates and grant them the proper authorizations to communicate with both the CRA and RQ;

  • Register the Liquidator of the estate at the RDPRM.

Next, we will contact all third-parties in order to establish a preliminary inventory of all the assets and liabilities of the estate.

We communicate with:

  • Government agencies

  • Life insurance companies

  • Financial institutions/Wealth management

  • Credit card companies and any other creditors

Once the inventory starts to take shape we can present it to the legatees.

Presenting the provisional balance sheet

Once we’ve gathered the information on the assets and liabilities of the Deceased, we now prepare and present to the legatees the provisional balance sheet. 

By reviewing the balance sheet, the legatees can decide whether or not they will accept or renounce to the estate. Again, this is a “first draft” of the inventory so-to-speak and therefore will be not be exact and precise. The goal is to determine acceptance or renunciation.

*For the purposes of this blog, we will discuss a solvent estate in which the legatees accept their inheritance.

Once the legatees accept the estate, we can move forward and begin.

At this point, we will:

  • Open an estate account

  • Recover and liquidate assets or rollover to spouse

  • Pay creditors

  • Transfer or sell immovables

  • File the income taxes up to date of death

Again, this is a general and superficial explanation of settling an estate—there are many more steps and tasks. Every case is different and we will adapt to the requirements and particularities of every estate.

Drafting the Estate Inventory

The Inventory is what we call “a snap shot” of all the assets and liabilities of the Deceased at the time of death. It is often difficult to obtain exacts numbers as of the date of death, but we try and be as precise as possible.

The preparation of an Estate Inventory is mandatory, however, the legatees may, if all in agreement, exempt the Liquidator from preparing an inventory. This is common in cases where the estate is straight forward, non-contentious, spouse is sole universal legatee, etc. Additionally, Inventories are best signed before a Notary to ensure their integrity.

What do we include in the Estate Inventory?

All assets and liabilities, including those related to the death and estate (ex: funeral & burial costs, legal fees, etc.) We will also include an approximation of income taxes due by the deceased up to DOD. 

Once the Inventory is complete, the Liquidator presents it to the legatees and is signed. The Notice of Closure of the Inventory is subsequently published in the local newspaper where the Deceased was domiciled and at the RDPRM, for consultation and notification purposes.

Paying off the debts of the estate

Once the Estate Inventory has been signed, registered at the RDPRM and published in the local newspaper, we can begin paying off the debts of the estate.

*Again, it is important to keep in mind that we are discussing a manifestly solvent estate and that the fiscal laws of distribution must be respected.

At this time there is often a lull period, however we continue to collect the assets and pay the debts as they present themselves. Meanwhile, the accountant has filed all incomes taxes up to DOD, as well as, the estate taxes. Once we receive all the Notices of Assessment and pay whatever sums are due, we can apply for clearance and distribution at both the CRA and Revenu Quebec.

This is crucial, non-negotiable step. Why? 

The clearance and distribution certificates confirm and ensure both the liquidator and the legatees that all sums owing to the Provincial and Federal Governments have been paid and therefore delivery of the assets can take place without any risk of claims by the government.

Having an experienced Liquidator to assist you and bring you peace of mind is often what the client is looking for.

Contact us for more details on our estate settlement services.

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