Throughout their life, an individual accumulates property, rights, and shares as part of their patrimony. Once they reach the end of their life, the individual’s patrimony is transferred to their heirs. This is what is known as the individual’s estate patrimony, which is governed by the rules of the Civil Code of Québec relating to succession law1.
Accordingly, the first idea that most often comes to mind is that an estate is positive, in the sense that money or property is transferred to the heirs. However, an estate may sometimes come with debts and can therefore create problems. So, what should be done with an unwanted estate? This article aims to inform you about the rules governing renunciation of an estate and to answer your questions.
How long do you have to refuse an estate?
The law provides that, from the date the succession opens—which usually coincides with the date of death—the successor will have 6 months to accept or renounce the estate2. Accordingly, section 632 C.C.Q. provides that “The successor has six months from the day on which his right opened to deliberate and exercise his option. This period is extended as of right by as many days as are necessary to allow him a period of 60 days from the closing of the inventory”3. It is strongly recommended that you wait until the inventory of the estate’s assets and debts is completed in order to assess whether accepting it is beneficial for you or whether it is preferable to renounce it. The law therefore provides for extensions where the inventory has not been completed4. However, you must be very careful if you wish to refuse an estate. Indeed, certain acts could result in your accepting the estate, legally, without that being your intention. It is therefore essential to know what could cause you to accept the estate without your knowledge. Here are actions that could be likely to lead to acceptance of the estate: using an asset of the estate for personal purposes, using a sum of money from the estate patrimony for your own purposes, failing to meet the deadlines to renounce the estate, proceeding with the liquidation without complying with the rules of the Civil Code of Québec, etc5. This is why it is important to be well informed throughout the sometimes complex estate process.
Types of estates
It is important to know that there are two types of estates. Specifically, there is the estate with a will and the estate without a will6. In most cases, the deceased will have made a will explaining how they wish to dispose of their patrimony and who their heirs are7. However, it may happen that the deceased did not make a will, that it is invalid (the estate must be intestate), or that it cannot be found. In that case, there are several rules governing the distribution of the estate patrimony. You will therefore need to consult the law to determine who the heirs are and what share of the inheritance they are entitled to8. In addition, it is important to distinguish between the heirs and the liquidator. The liquidator is the person responsible for the estate. They will be responsible for preparing the inventory of assets and debts, filing tax returns, managing and closing the deceased’s accounts, distributing the assets among the heirs, etc9. By contrast, the heirs are simply the persons designated by the deceased, in their will, to receive—according to the proportions determined by the deceased—what formed part of their patrimony10. In essence, the heirs have a right in the estate, and the liquidator administers the estate as a whole11.
Renunciation of an estate
The law provides that any person has the right to refuse an estate12. This is indeed provided for in section 630 C.C.Q.: “Every successor has the right to accept the succession or to renounce it”13. No one is required to accept an estate, which is why it is important to understand the responsibilities associated with it. Indeed, an individual’s estate may include debts. This is the case when liabilities exceed the value of the individual’s assets14. For the renunciation to be legally valid, it must be made by notarial act15. Indeed, if you do not have your refusal formalized by notarial act, there will be a presumption that you accept the estate. Sometimes, renunciation is also made by judicial declaration in cases where the estate is part of a dispute.
Debts and inheritance and estate tax in Québec
In Québec, when heirs accept the estate, certain amounts must be paid before the patrimony is distributed. Indeed, before distribution, the heirs must pay: costs related to the will and the funeral, the estate’s income taxes, and debts16. Thus, according to Revenu Québec, it is important to submit the deceased’s income tax return to the government and to pay the debts17. In addition, it is reassuring to know that if the estate is insolvent and you accept the estate, you will theoretically not be required to pay the deceased’s debts where they exceed the value of their assets, in the cases provided for in the Civil Code of Québec18.
Finally, you should know that if you decide to renounce the estate, you may be personally sued for actions you take following that renunciation19. In addition, you will be completely removed from the estate and will no longer be able to access any information relating to it20.
1Serbe Braudo, ed., Vocabulaire juridique, France, Dictionnaire du droit privé, Dictionnaire juridique, 2022, sub verbo “succession”.
2Revenu Québec, “Renouncing an estate”, (2022), online: Revenu Québec <www.revenuquebec.ca/fr/biens-non-reclames/sinformer/successions-non-reclamees/renoncer-a-une-succession/>.
3Civil Code of Québec, CQLR, c. CCQ-1991, s. 632.
4Revenu Québec, supra note 2
5Ibid.
6Revenu Québec, “Estates and taxation”, (2021), online: Revenu Québec < www.revenuquebec.ca/documents/fr/publications/in/IN-313%282021-09%29.pdf >.
7Ibid.
8Éducaloi, “Dying without a will”, (2022), online: Plan your estate <educaloi.qc.ca/capsules/mourir-sans-testament/>.
9Éducaloi, “The liquidator”, (2022), online: Administering an estate < educaloi.qc.ca/capsules/le-liquidateur/>.
10Serbe Braudo, ed., Vocabulaire juridique, France, Dictionnaire du droit privé, Dictionnaire juridique, 2022, sub verbo “inheritance / heir”.
11Ibid.
12Justice Québec, “Accepting or refusing an estate”, (2021), online: Gouvernement du Québec – Justice < www.justice.gouv.qc.ca/votre-argent-et-vos-biens/successions/a-faire-lors-du-deces-dun-proche/acceptation-ou-refus-de-la-succession/>.
13Civil Code of Québec, CQLR, c. CCQ-1991, s. 630.
14 Justice Québec, supra note 12.
15Ibid.
16 Justice Québec, “Delivery and partition of property”, (2021), online: Gouvernement du Québec – Justice < www.justice.gouv.qc.ca/votre-argent-et-vos-biens/successions/reglement-de-la-succession/delivrance-et-partage-des-biens/>.
17Revenu Québec, supra note 6.
18Revenu Québec, supra note 2.
19Ibid.
