Show Me the…Creditor
Although one of the key duties of an estate trustee is to distribute estate assets to beneficiaries, before getting caught up with any such distribution, estate trustees must also fulfill another key duty – paying any debts owed by the deceased.
In fulfilling this latter duty, it is now considered prudent behaviour for an estate trustee to advertise as to whether the deceased was indebted to any creditors. Distributing any funds before determining whether debts are owed, may result in the estate trustee being personally liable.
Estate trustee, fear not. Statute is in place to help guide the estate trustee so that this prudent behaviour is attained. According to s. 53 of the Trustee Act, an estate trustee may not be liable if they advertise in a newspaper for creditors to contact them within a specific period of time regarding any outstanding debts owed. Although this does not extinguish the debt, it may protect the estate trustee from personal liability.
However, this protection is by no means absolute. Simply placing an advertisement does not provide an estate trustee with carte blance to act mala fides.
While the statute does not provide as to how advertisements should be fashioned, it is now well established that the advertisement should remain published for three consecutive weeks in a daily newspaper, in a location where the deceased lived and worked at the time of death. In addition, the estate trustee should wait no less than 30 days between the date of the first advertisement and the date of distribution.