Insolvent Estate – Are you personally liable

Mismanagement of the Estate - While the executor is not personally liable for the debt, you could be if you mismanage the administration of the estate

Estate Valuation

One of the first priorities of the executor or estate trustee is to assess the value of the estate. While the deceased may have assets such as real estate, registered accounts or insurance policies, these assets may pass direct to the beneficiary or joint owner, and not form part of the estate.

Insolvent Estate

  • Debt, such as credit card debt, line of credit or taxes owed, if greater than the assets in the estate, the estate could be considered insolvent
  • Debts are to be paid in a predetermined legal order
  • Debt repayment to multiple creditors is to be paid proportionately

Example: You could be personally liable if the assets are distributed to the beneficiaries before the creditors have been paid

To protect yourself it’s important to speak with a lawyer, alternatively you can renounce your duty as an estate trustee