Why is it important that an Executor advertises for creditors of an Estate?
The debts of a deceased are part of what an Executor of an Estate has to deal with when they take on the role of Executor. They will usually be aware of the deceased’s debts when going through the deceased’s personal papers – credit card bills, mortgages etc. If the deceased owed money to anyone, there is usually a paper trail that the Executor can use as a starting point to know which financial institutions, for example, to contact to obtain the date of death balances on the outstanding amounts.
The Executor will have to prepare a Statement of Assets and Liabilities of the deceased, where the Executor lists the debts they have found. But how does the Executor really know they have captured everything? What if there are creditors that the Executor doesn’t know about?
To avoid potentially being personally liable for these debts, the Executor should advertise for creditors. In BC, a single advertisement in the BC Gazette will suffice to show that the Executor tried to find these creditors. The Notice advises readers that the deceased has passed away, gives an address where the Executor can be reached (usually the Estate’s legal counsel), and gives a deadline for the creditor to give the details of the claim to the Executor.
The deceased’s debts must be paid before any beneficiaries can receive their share of the Estate. Advertising for creditors is very important because it protects Executors against creditor claims that arise after they have distributed the Estate. As the Executor, you could be personally liable if you don’t pay the deceased’s debts, including any taxes owed, before you distribute the Estate, so advertising for creditors is key.
This is provided as information ONLY; it should NOT be construed as legal advice. You should consult with a lawyer to provide you with specific advice for your own situation. For more information on estate planning/incapacity planning and to discuss your specific circumstances, please contact Vanessa DeDominicis on 250-869-1140 or [email protected]. Vanessa practices in the area of Wills and Estates at Pushor Mitchell LLP in Kelowna and would be more than happy to assist you.
