Choosing a Liquidator for your Québec Last Will and Testament
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29
Jan
2023
- Posted By : Tim Hewson
- 0 Comments
One of the most important appointments you will ever make is naming the Liquidator for your Québec Last Will and Testament. The Liquidator is the uniquely Québec term for an estate Executor or Trustee.
The Liquidator will use your Will to speak on your behalf as if you were alive. This is a responsibility that you would not want to give to just anyone.
The law requires a Liquidator because someone must be responsible for collecting the assets of the succession, protecting the estate property, preparing an inventory of the property, paying valid claims against the succession (including taxes), representing the estate in claims against others, and, finally, distributing the estate property to the legatees (beneficiaries). These last two functions may require liquidating assets; that is, selling items like stocks, bonds, even furniture or a car to have enough cash to pay taxes, creditors or legatees. The Last Will and Testament can impose additional duties not required by law on the liquidator: choosing legatees or distributing personal property, even investing funds.
Typically, your Liquidator will be a family member or close friend. Most commonly, it is a spouse or a child. Most importantly, the Liquidator must be a person whom you trust completely. If you do not know anybody who has all of the required qualities, then an independent professional will do the job for a fee.
Appointing a professional
One approach is to appoint someone with no potential conflict of interest - someone who doesn't stand to gain from the Last Will and Testament. For this reason, many people avoid naming friends or family members. This helps avoid will contests from disgruntled relatives who might accuse the liquidator of cheating. If you have several legatees who don't get along, you may want an outside liquidator who's entirely independent. The larger the succession, the more the potential for conflicts, and the more you should consider naming an outside liquidator. You should also consider the possibilities of conflicts of interest if you have several legatees.
There are sometimes reasons for choosing a paid liquidator instead of your spouse. Your spouse may be incapacitated by grief, illness, or disability. Nonetheless, he or she as liquidator will be personally liable for unpaid estate taxes and fines for late filings, even if he or she has delegated such tasks to a lawyer or notary.
Appointing a friend or family member
Do not choose somebody who is too old, unstable or ill, nor should you appoint a minor, an incompetent person or a convicted criminal.
Select a person who is diligent and acts with integrity. Otherwise, they may fail to follow appropriate accounting practices. For example, they might not file accurate tax returns, might fail to pay off debts, or might make poor investment decisions. A poor Liquidator might not distribute your property in a timely manner or according to your wishes. In extreme circumstances, the Liquidator might actually embezzle funds for themselves or to benefit favoured legatees.
Can the Liquidator also receive something in my Will?
Yes. Your Liquidator has a legal responsibility to treat all legatees fairly under the directions given in your Last Will and Testament. There is nothing preventing your Liquidator from being a legatee of your succession, unless there is a danger that they may not treat all legatees equally.
In fact, for a simple distribution of the succession, where most of the succession is passing to a single legatee, it is common for that legatee to also be named as the Liquidator of the Last Will and Testament. For people who are married, the first choice Liquidator is often chosen to be their spouse.
You can choose more than one person to fulfill these duties: co-liquidators. This is a way to ensure that at least one person has legal or financial expertise and one is close to the family. If you choose this course, be sure to pick people or entities that can work together. You must also choose a successor in case your first choice dies or is unable to serve.
Why should I name an alternate Liquidator?
You should name an alternate Liquidator in case any of your first choice Liquidators cannot, or do not want to serve. If you have named more than one Liquidator, your alternate will replace the Liquidator who cannot serve. If you have only named one Liquidator, then the alternate will simply replace them as the sole Liquidator.
If you do not name an alternate Liquidator and your first choice Liquidator cannot serve, then a person will be appointed by the courts to distribute your succession.