Finding Estate Debts (NB)

Updated Jul 7, 2024
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As part of taking inventory, an estate executor must look for and validate the debts of the decedent's estate.

Notice of Death Publication

If the estate is going through probate, the executor is often required to advertise for creditors by publishing a notice of death in the local newspaper where the decedent lived (see Sample Estate: Task - Publish Notice of Death). The purpose of this notice is designed to inform potential creditors of the death, and while details vary from province to province, creditors typically have from 1 to 6 months to contact the estate about any debt claims. If a potential creditor misses the claims deadline then the executor is protected from personal any personal liability related to the debt, and in some provinces, the creditor's debt would be completely invalidated (see Sample Estate: Task - Debt Claims Expired).

Even if the estate is small enough to avoid probate, or the probate notice is not required, the executor may still wish to publish a notice of death, to protect the estate from future debt claims, which could be quite problematic if the estate assets have already been distributed.

NB Specifics

In New Brunswick, there is no requirement to publish a notice of death, but many executors still choose to do so, requesting that any creditors contact them within 30 days of publication. Having done so may minimize executor liability if previously unknown creditors attempt to make claims after the estate has been distributed.

Informal Debt Claims

There are certain debts you will quickly discover as you go through the decedent's mail, or are contacted by creditors, such as insurance premiums, credit card balances, utility bills, and so forth.

If desired, you can also run a credit report on the deceased, perhaps discovering debts about which you would otherwise be unaware. You may be able to get the credit report for free if and when you notify the credit reporting agencies of the death.

You don't necessarily have to pay any of these debts unless the associated creditor makes a formal claim against the estate, potentially in response to the notice of death, but most executors will opt to do so in an attempt to "do the right thing". Moreover, failing to pay some of these ongoing bills may result in unwarranted harm to the estate (such as foreclosure or frozen pipes bursting): see Resolving Debts: Ongoing Bills.

In any case, these bills will likely continue to arrive over time, so it will likely be several months before you have a complete picture of all debts.

Statute of Limitations and Claims Deadlines

All provinces impose statutes of limitations on debts, meaning that after a certain amount of time passes from a debt's due date, the courts can no longer require the debtor to repay the debt. Typically, these time limits range from 2 to 6 years for unsecured debts (such as credit cards), and sometimes even longer for contract debts.

When someone dies, these statutory limitations are often both extended and shortened. They can be extended in that the expiration period is often put on hold for a few months, so that everyone has a chance to get organized and sort things out. This "hold" is officially called "tolling" the debt, but is not usually a major factor since statutory limits are measured in years.

However, statutory limits are also sometimes shortened in provinces where creditor notices put strict time limits on claims, and bar any claims after that period has expired (in other words, even if a statute of limitations implies that a debt would still be enforceable, it will not be enforceable if the estate limits have kicked in). The section above on Notice of Death Publications explains how the estate can limit the exposure to debts.

NB Specifics

In New Brunswick, a creditor has 15 years to make claims concerning most unsecured debts, but only 2 years from when the claim is discovered or ought to have been discovered (see Limitation of Actions Act, SNB 2009, c L-8.5, s 5). Publishing a notice of death puts most claims into the "ought to have been discovered" category.

However, this 2-year period resets whenever a debtor acknowledges the debt in writing or makes a payment towards that debt, so as a New Brunswick executor, you must be careful about inadvertently revitalizing a debt that was already barred (i.e., expired) or about to be barred (see Limitation of Actions Act, SNB 2009, c L-8.5, s 19).

An executor can be held personally liable if he or she distributes estate funds to the point that the estate cannot pay debts that subsequently become known before their statutes of limitation expire. For this reason, many executors choose to advertise for creditors in an attempt to ensure they know of all debts as soon as possible.

Additional Information

See also Taking Inventory and Resolving Debts.

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