Estates
The spouse, children or other family members of a deceased person who wish to dispose of the residence or other immovable property are likely to enlist the services of a real estate broker. Can they sell these properties? If so, who will sign the contracts and forms? What documents will be required to complete the transaction? Before answering these questions, certain concepts need to be addressed.
Will search
Before proceeding with the settlement of an estate, it is necessary to verify whether the deceased left a will. The will search is therefore an important step following a death. Whether or not a will was made, it is mandatory to conduct a will search in Québec’s registers of testamentary provisions and protection mandates. This process will make it possible to determine:
- whether the will in the hands of a client is indeed the last one;
- whether a more recent one exists;
- whether the deceased died without leaving a will.
Two official registers exist: the Chambre des notaires du Québec and the Barreau du Québec. These two registers are independent of each other. A search in one will not tell you whether a more recent will exists in the other.
Two requests must therefore be made, one for each register.
It is not the real estate broker’s responsibility to take this step. However, he cannot intervene in a transaction involving an estate until this step has been completed.
TESTAMENTARY SUCCESSION
Four forms of wills exist in Québec:
1. holograph will;
2. will made in the presence of witnesses;
3. notarial will;
4. “surviving spouse” clause in a marriage contract.
1. Holograph will
A holograph will must be written entirely and signed by the hand of the testator.1 It is subject to no other formal requirement. This will must be probated by the court. The probate process is an application to the Superior Court to have the will verified by a judge, in the manner prescribed in the Code of Civil Procedure.2 The judge will verify that the conditions of form have been respected and will determine the validity of the will.
1 Art. 726 C.C.Q.
2 Art. 772 C.C.Q.; art. 303 C.C.P.
► CAUTION
The probate or verification of a will can take several months. Until the will is probated, the legatees or liquidators are unknown. Consequently, their ability to bind the estate is not assured. Real estate brokers must not enter into a brokerage contract until judgment has been rendered.
2. Will made in the presence of witnesses
This form of will is written by the testator or by a third person. In the presence of two witnesses of full age, the testator declares that the document he is presenting is his will, but is not required to divulge its contents. He signs it at the end or, if he has already signed it, acknowledges his signature. He may also have a third person sign it for him in his presence and according to his instructions. The witnesses sign the will forthwith in the presence of the testator. Like the holograph will, this form of will must also be probated.
3. Notarial will
A notarial will is executed by a notary, en minute, in the presence of one or two witnesses. It indicates the date and place at which it is received. Unlike the two previous types, it is an authentic act, and therefore does not have to be probated by the court to prove its content.
4. Relevant clause in a marriage contract
The last form of will is a clause in a marriage contract by which the spouses bequeath their property to the surviving spouse or to children born or to be born. Since a marriage contract must be notarized, this form of will does not need to be probated.
Types of legacies
Just as there is more than one form of will, there are also different types of legacies in wills:3
1. Universal legacy
2. Legacy by general title
3. Legacy by particular title
3 Art. 731 C.C.Q.
1. Universal legacy
A universal legacy entitles one or several persons to take ownership of the entire estate.4
2. Legacy by general title
A legacy by general title entitles one or several persons to take:
- ownership of an aliquot share (or percentage) of the succession;
- a dismemberment of the right of ownership of the whole or of an aliquot share of the succession;
- ownership or a dismemberment of the right of ownership of the whole or of an aliquot share of all the immovable or movable property, private property, community property or acquests, or corporeal or incorporeal property.5
EXAMPLES: “I bequeath my movable property to Louis and my immovable property to Roland” or “I bequeath my immovable to my three children Frederic, Nicolas and Jean-François.”
4 Art. 732 C.C.Q.
5 Art. 733 C.C.Q.
3. Legacy by particular title
Any legacy which is neither a universal legacy nor a legacy by general title is a legacy by particular title.6
EXAMPLES: “I bequeath my watch to Michel” or “I bequeath my sailboat to Louis.”
These are legacies by particular title, where a legatee inherits one or more clearly identified items from the estate.
The main advantages of making a will are:
- choosing one’s heirs;
- deciding what each will receive;
- designating the person who will settle the succession, i.e. the liquidator.
In addition to the legatees, the liquidators play an important role in transactions involving a testamentary succession.
6 Art. 734 C.C.Q.
Liquidator
The person responsible for settling the succession is called the liquidator (formerly called testamentary executor). The liquidator administers the succession and may oversee the distribution of the property. He can be appointed by will,8 by the heirs,9 or in some cases by the court.7 The liquidator appointed by will is not bound to accept the charge.10
The liquidator’s main functions are to:
- make an inventory of the property;
- collect the debts, i.e. the sums of money due to the deceased;
- pay the debts of the deceased;
- close the inventory and register the notice of closure in a newspaper and in the Registre des droits personnels et réels mobiliers (RDPRM);
- deliver the property to the heirs.
The liquidator is said to exercise the seisin of the deceased’s property. This means that the liquidator administers and manages the property of the deceased during the period of liquidation of the succession. The liquidator can therefore sign for and on behalf of the succession in order to bind the succession to the sale of an immovable owned by the deceased, until such time as the succession is settled.
Like the tutor, the liquidator is an administrator of the property of others.11 The liquidator may therefore be charged with various powers of administration, including simple administration or full administration. The testator may have indicated in his will the powers of administration given to the liquidator.
Caution! If the will is silent as to the powers granted to the liquidator, the latter will be deemed to have only powers of simple administration.
However, sometimes – particularly in holographic wills where the testator has not obtained professional advice – the intention of the testator to grant simple or full administration to the liquidator is not clearly established.
In such cases, it is strongly recommended to obtain a legal opinion before accepting to represent a liquidator.
In addition to these special situations, the will may provide that the executor has full administration, which means that he is authorized to sell alone; in this case the broker does not need to obtain the signatures of the testamentary heirs.
If the will provide that the liquidator has simple administration, the liquidator will have to get the written authorization of all the testamentary heirs (if they are universal or by universal title) or legatees by particular title to whom the property devolves in order to sign. Such authorization could take the form of a resolution attested to by a jurist, who will have the obligation to verify the identity of the signatories and to ensure that the content properly reflects their wishes.
Caution! If more than one liquidator has been designated, all liquidators must sign all brokerage contracts, promises to purchase and counter-proposals.
7 Art. 786 C.C.Q.
8 Art. 785 C.C.Q.
9 Art. 788 C.C.Q.
10 Art. 784 C.C.Q.
11 Art. 802 C.C.Q.
► DUTIES AND OBLIGATIONS OF THE BROKER
In cases of testamentary succession, only the will contains the information as to whether the liquidators have simple or full administration of the deceased’s property.
Prior to entering into a brokerage contract, what documents must be obtained and kept?
- The will (a certified copy or a certified extract confirming the liquidator’s powers of simple or full administration);
- The declaration of transmission (unless there is a particular situation);
The best practice is to have it available at the time of signing the brokerage contract. However, the declaration of transmission may not be available at that time. In this case, it is possible to enter into a brokerage contract if the broker has a copy or certified extract* of the will and the certificate of search for the will, and has consulted the client’s notary. In this situation, it is important that the broker properly advise the selling party as to the deadlines to be considered for the signing of the deed of sale (the declaration of transmission must be signed and published before the transfer of the titles to the buyer).
- The will search certificate (necessary only if the declaration of transmission is not available when the brokerage contract is taken out).
*If the client is reluctant to provide a copy because of the confidential information contained in the document, the broker may request that the notary provide a certified extract of the will, dealing only with the liquidator’s powers of administration.
For more information: The use of forms in estate settlement
Declaration of transmission
Settling an estate can be a lengthy and complicated process. The broker has an obligation to verify and substantiate all information provided to him. Failure to do so may result in liability.
The declaration of transmission is a document that allows the broker to make certain standard verifications in the context of a succession.
Nature and form
The declaration of transmission is a notarial act en minute to transfer the right of ownership of an immovable from the deceased to the heirs or the liquidator until its sale by the estate. This declaration must be published in the Land Register.
Content
- Name, occupation and residence of the deceased
- Matrimonial regime of the deceased
- Confirmation of death of the deceased
- Confirmation of title of ownership of the deceased
- Whether or not it is a testamentary succession;
- If so, the form of will is specified
- Name(s) of legatee(s)
- Name(s) of liquidator(s)
- List of immovables that are part of the succession
| Who signs the forms? |
Documents to be obtained and kept in the record |
|
| No liquidator designated in the will |
All universal legatees or all legatees by universal title |
Declaration of transmission |
| One or more liquidators designated in the will |
Full administration
Simple administration
|
Full administration
Simple administration
|
:
LEGAL SUCCESSION OR INTESTATE SUCCESSION (WITHOUT A WILL)
Legal heirs
If a person dies without a will, the succession is said to be legal or intestate. The heirs are called legal heirs or successors and are determined by the Civil Code of Québec.12
12 Art. 617-624 C.C.Q.
EXAMPLE: Laurent is married to Anne and they have three children. Laurent dies. If he did not make a will, the Civil Code of Québec provides that Anne will receive one third of the estate and the children will receive the remaining two thirds.
Liquidator
The legal heirs can meet and decide, by majority vote, who could handle the liquidation of the estate. This decision is then recorded in a “notice of designation of liquidator.” The Civil Code of Québec does not require for any particular form for this act. However, in the context of the broker’s work, it is recommended that only a notarized or jurist-certified act be accepted.
The liquidator has the same functions as those mentioned in the case of a testamentary succession. The liquidator appointed by a majority of the legal heirs, however, is only charged with simple administration of the property of the deceased. The legal heirs cannot invest the liquidator thus appointed with full administration.
Consequently, the heirs will have to unanimously authorize the liquidator to sell the immovables that are part of the succession. Both the “notice of designation of the liquidator” and the “authorization to sell the immovable” can appear on the same document.
In the absence of a notice of designation and authorization to sell, all legal heirs will be required to sign the brokerage contract or promise to purchase, as well as the deed of sale for the property. The declaration of transmission should be consulted to determine who the legal heirs are.
Whether or not the succession is testamentary, the heirs must provide the broker with a declaration of transmission.
Declaration of transmission
When a transaction involves the sale of an immovable by the estate, the real estate broker must obtain a declaration of transmission.
This document will indicate whether the person died with or without a will, who the legal heirs are and what is the designation of the immovable. Sometimes the appointment of the liquidator is also included in this document.
If the heirs do not agree on whether to sell the immovable, the heirs who do agree must apply for authorization from the court and the broker absolutely must obtain all the required documents to ensure that all relevant signatures appear on the forms.
If the broker does not obtain all the signatures and the contracts and promises to purchase are signed only by the heirs in agreement, the transaction will be void and the broker will have created unnecessary work for the buyer’s brokers. Because the selling broker omitted steps in his search to determine who is authorized to sell the property, all these people could hold him liable for damages.
| Who signs the forms? |
Documents to be obtained and kept in the record |
|
| No liquidator appointed by the heirs |
All heirs |
Declaration of transmission |
| One or more liquidators appointed by the heirs |
Simple administration
|
Simple administration
|
:
Conclusion of liquidation:
- by delivery of bequests;
- by distribution of the property of the succession.
Deed of delivery of legacies
Whether it is a legal (intestate) or testamentary succession, the publication of the deed of delivery of legacies, which is a notarial act, in the Land Register of the Bureau de la publicité des droits, will indicate the termination of the liquidation of the estate by the liquidator.
It is not uncommon to see the declaration of transmission and the deed of delivery of legacies on the same document. Once this document is signed, the heirs become the owners of the property delivered.
This is because heirs do not automatically take possession of their legacies following death. The delivery of the legacies is a clause contained in the declaration of transmission which stipulates whether the property is immediately transferred to the heirs or whether it is retained for management by the liquidator until the succession is liquidated.
When a client gives the broker the deed of delivery of legacies – which is the equivalent of the heirs or legatees’ deed of ownership, as applicable, the broker has the correct document to do his job. Once the deed of delivery of legacies is issued, the broker is no longer required to obtain the declaration of transmission.
Deed of partition of the property of the succession
Where more than one heir becomes the owner of an immovable, the heirs who have become undivided co-owners of the property of the succession can divide the property through the deed of partition, so that each of them owns a particular asset.
However the legislator has provided that partition may not take place or be required before the liquidation is terminated.13
EXAMPLE: The legator’s estate includes an immovable in Saint-Sauveur and one in Laval. Pierre and Paul, the two sole heirs, become undivided co-owners of the two properties. Further to the deed of partition, Paul becomes the sole owner of the Saint-Sauveur immovable, and Pierre becomes the owner of the Laval immovable. The client can give the broker this deed of partition, which acts as his ownership title.
13 Art. 836 C.C.Q.
Who signs the forms?
- The owner of the asset.
What document must the broker obtain and keep in the record?
- The deed of partition.
Training on this topic:
Successions: who signs what?
