5 Things You Must Know if You are a Liquidator
By: Robert Catalano
At some point in your life you may be asked to be the liquidator of a friend’s or relative’s Will. While it is usually considered an honour, it can also be a complicated undertaking to settle an estate according to the deceased’s wishes — one that can seem overwhelming when you’re also grieving.
Acting as a liquidator means being responsible for an often lengthy, intensely detailed task list that bears with it not only the burden of ensuring a loved one’s last wishes are carried out, but legal liability as well. Your overall responsibility as a liquidator is to administer the estate according to the deceased’s final wishes as expressed in the Will and according to the law.
It may take about 18 months to settle even a simple estate, and the liquidator has to complete as many as 70 different tasks and duties. This includes finding and, if necessary, probating the Will, preparing an inventory, protecting and distributing assets, and paying outstanding debts and taxes. You will also have to prepare a final accounting for the beneficiaries of the estate.
Five things you must know if you are a liquidator
1. Understand the scope of the task you are being asked to perform, and assess whether you have the time and resources to perform it, before you start acting as liquidator. If you determine you don’t have the time, knowledge or resources, you will not be forced to act, but you must renounce your liquidator duties very early on, before you get involved in the estate.
2. Keep the lines of communication open with all parties involved in the estate. A big source of frustration can be unrealistic expectations about what a beneficiary will receive, and how quickly all the necessary tasks can be completed and assets distributed.
3. Stay organized. Keep all aspects of the estate completely separate from your own documents and funds, and be meticulous with your record-keeping. You will need it later when it comes time to do things such as prepare tax returns and provide an account to the beneficiaries of the estate.
4. Remember that you are a fiduciary, meaning that you will be held to the highest level of trust and integrity. You must always act in the best interests of the beneficiaries of the estate, and if things go wrong, you, not they, are personally liable.
5. Above all else, know when to seek qualified professional advice.
Please join me on November 13th at the RBC Monkland branch for a free Will and Estate Planning seminar where we will discuss these and other points in greater detail. Please note that seating is limited, so please RSVP as soon as possible.