Successions and Trusts

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The Will, its Validity, and Contestation

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Spouses, family members, and loved ones of the deceased must first obtain the death certificate. It is possible to request it online from the Quebec Registrar of Civil Status. http://www4.gouv.qc.ca/en/Portail/Citoyens/Evenements/deces/Pages/demander-certificat-acte-deces.aspx

The next necessary step is to verify if there is a will. If there is no will, what we call intestate succession or “ab intestat” (i.e., dying without a will in Latin), all legal heirs will also become the executors of the estate. For the reader, the executor or “liquidator” is the person responsible for administering or managing the deceased's assets and debts. If there is a will, often notarized, it must be referred to. To do this, a testamentary search must be conducted with the Chambre des notaires https://www.cnq.org/en/demande-recherche-testamentaire.html and Barreau du Québec https://www.barreau.qc.ca/en/testaments-mandats/recherche/ to ensure that the will is indeed the last one. Indeed, just because you accompanied the deceased to the notary's office does not mean they did not subsequently sign another will at the notary's office, replacing the previous one. Therefore, it is essential to have the latest will in hand to check who the executors responsible for administering the estate are, as well as who the heirs are.

When the will is not notarized, such as when it was made before witnesses, it is necessary to prepare and present a procedure before the court to recognize the validity of the will.

The next step is for executors to register a notice of appointment with the Registre des droits personnels et réels mobiliers (RDPRM) and a transmission statement, when there is real estate, with the Registre Foncier (Land Registrar).

At this stage, there are generally no conflicts unless the validity of the will is contested. To contest the validity of a will, especially a notarized will, for example, judicial proceedings involving the executors and concerned heirs, the drafting notary, to name a few, must be initiated. This is a procedure that cannot be taken lightly and will require demonstrating, among other things, that the testator, in this case, the deceased, did not have a free and enlightened mind when signing the will at the notary's office, or that they were subject to undue influence. Although this ground for invalidating the will is not explicitly stated in the Civil Code of Quebec, undue influence involves a set of behaviors, maneuvers, and actions aimed at diverting the testator's real will to impose a forced will. An evocative and often invoked example is the new spouse of a man who did everything to isolate the testator from their family, to influence them to disinherit their children in favor of the new spouse, in the years leading up to their death. The disinherited children will then try to demonstrate in court that there was undue influence, thereby invalidating the last will that left all the assets to the new spouse.

The next step, often a source of conflicts between executors, heirs, and legatees of a particular property, is the proper settlement of the estate.

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Estate Settlement

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To settle the estate, the executors must first close the deceased's accounts and open a new bank account for the estate. To do this, the executors can present the death certificate, the results of the testamentary searches, and a copy of the will designating the executors responsible for administering the estate to the bank. In this new bank account, the executors will be instructed to deposit any subsequent money received for the estate. Any accumulated money will be used to pay funeral expenses, debts, and professional services required for settling the estate, such as notary fees.

The following step is for the executors to prepare an inventory list of all the estate's assets (e.g., the house, cottage, car, furniture, RRSPs, investments, bank accounts, accounts receivable, etc.) and all the estate's debts (e.g., credit line, loans, variable credit contracts, mortgage, Hydro-Québec bills, etc.) of the deceased. The inventory, signed before two witnesses or a notary, will serve as a basis for liquidating all assets, paying debts, and distributing the surplus to the heirs according to the last wishes.

Then, the executors must publish the notice of inventory closure with the Registre des droits personnels et réels mobiliers (RDPRM) to notify the public and anyone interested that the inventory has been prepared. It should be understood that the estate may still be liable to the married spouse or children of the deceased, who may, for example, claim spousal support, even if they are not heirs under the will. This is one of the reasons why the law requires the publication of the inventory closure notice.

During the estate settlement, it is recommended for the executors to consult an accountant or a Certified Professional Accountant (CPA). Indeed, the estate, like any other taxpayer, must file a tax return and pay taxes. It will be essential for the executors to wait for the tax certificates from Revenu Québec and the Canada Revenue Agency (CRA) indicating that the estate no longer has any other taxes to pay and allowing the executors to distribute the money to the heirs. In fact, if the executors distribute the money without obtaining the ARC Discharge Certificate and the Certificate authorizing the distribution of Revenu Québec property beforehand, they could be assessed by taxes.

Next, the executors can pay the estate's debts, sell assets, such as the deceased's house, as well as all other real estate or movable property incurring expenses and maintenance. They can also provide legacies, namely assets that the deceased wished to personally give to legatees designated in the will. This stage of estate settlement is often a source of conflicts. Sometimes heirs may feel that the house is not selling quickly enough or that it is not being sold at a good price. Conversely, executors may want to put the deceased's house up for sale, and the heirs may object, claiming they have the right to continue living in the property.

Furthermore, another source of conflicts is expenses reimbursed to the executors from the estate's bank account. The law provides that executors can be reimbursed for reasonable expenses incurred during the estate settlement. Therefore, executors will want to be as transparent and clear as possible with the heirs to avoid fueling fears or doubts about their honesty and integrity in estate management.

Heirs may sometimes seek to take steps to remove executors from their roles and replace them with other executors.

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Replacement of the Executor

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When the heirs of an estate wish to replace the executor of an estate appointed by the deceased, they must address the Court. However, this is not a trivial matter because the Court will have to decide if there is sufficient reason to request the replacement of an executor. The reasons generally recognized by the courts include:

Negligence or failure of the executor to fulfill their duties, as outlined in articles 794 and 803 to 814 of the Civil Code of Quebec, which can be grouped as follows:

• Obstruction of the liquidation (e.g., refusing to sell the house as specified in the will)
• Conflicts of interes
• Stalemate or inaction since the death of the deceased
• Fraud and embezzlement
• Inability of the executor to carry out their duties, such as illness or being out of the country
• Breach of the executor's duty before the testator's death, e.g., fraud and embezzlement while acting as a mandate in case of incapacity
• At the request of the executor themselves
• The appointment of executors is part of the testator's last wishes, so the courts will be cautious before removing an executor, especially when other options are available to move the estate settlement forward.

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Trusts

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Upon death, it is possible that children or adult children with disabilities may not have the capacity to manage the inheritance they receive. That is why professionals, such as notaries, will prepare a testamentary trust. The testamentary trust takes effect upon the death of the deceased and will serve to administer the assets in the best interests of the beneficiary, often children or adults with disabilities. The principles of sound management of the trust are similar to those applicable to executors of an estate. In case of disagreement between the executors, beneficiaries, and any other interested parties, it will be necessary to approach the courts to request their intervention in the management of the testamentary trust.