Publication of mr. Paul Schepel, JPR Lawyers, preferred partner of Liesker.
If you choose to accept benefits, an estate must be settled before it is distributed. This involves taking an inventory of all assets and debts, then paying the debts as much as possible from the estate before you can distribute any remaining balance.
Estate description as a basis
A benefit acceptance always requires an estate description. This is a piece of paper that lists what assets there are and their value. It also lists debts.
The main rule is that the heirs are the liquidators of the estate, but the heirs and also creditors can ask the court to appoint an independent liquidator.
Declaring an estate bankrupt is no longer possible. But debts can still exceed assets. As soon as you find this out as liquidator, you should write a letter to the district judge to report it. The district judge then asks for the estate description and determines whether to take action based on it.
Two types of liquidation
The law recognizes two types of settlement of an estate:
- The light liquidation: it applies when the heirs liquidate and the subdistrict court does not determine otherwise. The heirs must make an estate statement and ask creditors to let them know what they are owed.
- Heavy liquidation: this applies when the district judge determines that these rules must be followed, usually when there is a fairly large estate with many debts to be liquidated. This is skilled work that should be done by a professional and not by the heirs themselves. In addition to making an inventory of the estate, this also requires calling all creditors by means of an announcement in the Official Gazette. Finally, the liquidator must file accounts and a distribution list with the district judge.
A liquidator has several powers. This allows him to shorten gifts and claim so-called quasi-legacies if needed to pay debts. A payout from a life insurance policy, where the testator paid the premium, is an example of such a quasi-legacy. The liquidator can then approach the beneficiary of that insurance policy to claim this amount for creditors.