There are many unknowns for those who agree to act as Estate
Trustees. Many Estate Trustees are not paid and are willing
to "volunteer" their time, but would not do so if it may
put their own assets at risk. If you are named as an Estate
Trustee, you may want to know whether you might be personally
liable for the Estate's debts if the Estate cannot pay its
Generally the answer is no, the Estate Trustee will not be
required to pay the Estate's debts if the Estate runs out of
assets to pay its debts, however, there are some rare instances
where the Estate Trustee could run into trouble such as:
if the Estate Trustee fails to determine and pay all of the
debts of the deceased before the Estate Trustee distributes the
Estate, then creditors can sue the Estate Trustee personally for
if the Estate Trustee fails to pay debts in priority as
prescribed by law (for example, reasonable funeral expenses get
paid in full first), then the Estate Trustee could be found to be
personally liable for debts;
if the Estate Trustee pays some bills (for example, some
debts to some creditors) in full such that there is insufficient
money to pay other creditors, then the Estate Trustee may be found
liable for some of the unpaid debt.
Society needs people to act as Estate Trustees and as a result,
the Courts do not want to discourage people from acting as Estate
Trustees unnecessarily and so there are defences that Estate
Trustees can use to avoid personal liability even where they get
into trouble. For example, if the Estate Trustee can convince
the Court that he or she acted honestly and reasonably to protect
or conserve the Estate assets, the Court can relieve the Estate
Trustee from personal liability.
If you are named in someone's will to be the Estate Trustee,
you can always pass and avoid even the slightest risk that you
could be held responsible for any debts. If you accept the
appointment as Estate Trustee, then provided you administer the
Estate properly, you should not be responsible for its debts.
To learn how to administer the Estate properly, Estate Trustees can
retain a lawyer to advise them on how to do so and avoid becoming
personally liable for the deceased's debts.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
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