Let us help you through difficult situations
Are you the liquidator or beneficiary of an insolvent estate? We can help you deal with the situation by relieving you of your responsibilities to creditors and minimizing inconveniences and delays.
Finally! Answers to your questions
1. Are insolvent estates a common occurrence?
Yes, insolvent estates are more common than ever because of the increase in individuals’ indebtedness rates. We are seeing more and more people retiring with debt.
Two other factors explain this phenomenon: an increased life expectancy reduces an individual’s equity on property upon death and the designation of a beneficiary on life insurance policies and on investments results in a decrease in assets allocated to the estate.
2. Can an estate go bankrupt?
Yes, subsection 49 (1) of the Bankruptcy and Insolvency Act (BIA) allows the will’s executor, the estate’s liquidator or administrator, with the Court’s permission, to file an assignment of the deceased’s property to the creditors.
3. How does an estate go bankrupt?
- Through the assignment, the Trustee acquires the assets received from the estate and will dispose of them quickly.
- The Trustee files estate tax returns with the Canada Revenue Agency and the provincial revenue department.
- The proceeds from the sale of property, net of fees and expenses, is paid to the creditors, as provided in Section 136 of the BIA.
4. Does the liquidator or do the beneficiaries have any responsibility toward the creditors?
The Court decision releases the liquidator and/or heirs from estate obligations.
5. How is the Trustee paid?
The Trustee will be paid from estate assets or according to an agreement with those using his or her services.
6. What are the advantages?
- Most cases are settled within nine months.
- Section 136 of the BIA allows for the payment or reimbursement of funeral and estate management expenses, and legal fees.
- Simplified procedures are implemented to settle family assets and the partnership of acquests.
- The assignment helps eliminate estate technicalities and creditor questions.
- The bankrupt estate releases the liquidator from his or her responsibilities regarding provincial statutes (i.e. environmental issues, operating company, possible tax debt)
- If, once the property has been liquidated, the estate proves to be solvent, any surplus is remitted to the beneficiaries.
If you are mourning the death of a loved one, this is surely a difficult time in your life. Contact one of our consultants at 1-866-322-8585 and let us take away the financial burden.
Let us help you
To learn more about managing an insolvent estate and the support available to you from our trustees, contact a Raymond Chabot consultant. With over 90 offices available, there is surely one in your neighbourhood. We can help you find solutions.
