Jun 10, 2022
How long does an executor have to settle an estate in Ontario?
Settling an estate is a challenging responsibility that can often take between six months to a year in Ontario. Here’s what you need to know.
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An important part of settling someone’s estate includes liquidating their assets in order to be able to pay outstanding taxes, fees, and distribute inheritances. These assets typically include real estate and personal property, which can include both tangible and intangible items.
In some cases, you may choose to liquidate your assets while you’re still alive in order to simplify the estate settlement process. In other cases, the estate executor will be in charge of overseeing the liquidation of assets during probate. Here's everything you need to know about liquidating assets.
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One of the biggest advantages of liquidating assets is being able to pay off debt. By converting assets into cash, the estate executor can help pay off any debts owed by the estate, as well as being able to cover the estate's expenses. This minimizes stress and promotes greater financial security on a long term basis.
Moreover, liquidating the assets of an estate makes it easier for the estate executor to distribute any remaining assets. These remaining assets, which are also commonly referred to as "estate residue," describe what's left over after all debts, taxes, and further expenses are paid off. Liquidating an estate during probate helps provide the financial resources needed to pay off these remaining assets.
Before liquidating the assets in the estate, it's crucial to note that not all assets can easily be converted into cash. These assets are known as non-liquid or fixed assets. Examples of non-liquid assets include the following:
These assets are often difficult to convert into cash, and tend to lose part of their value when converted into cash. Before you liquidate your estate, be sure to take these fixed assets into account.
Once you've taken stock of all your non-liquid assets, the next step is to identify your liquid assets. These refer to assets that can easily be converted into cash or cash equivalents in a short period of time. Here are some common examples to take into consideration:
These are just a few examples of the assets that you can liquidate during estate planning. Be sure to determine where your assets fall before beginning probate.
Liquidating the assets in an estate can lead to a wide range of benefits, such as paying off any outstanding debt and distributing remaining assets with less difficulty.