Can an executor borrow money to cover probate costs?

Responsibilities of an executor during probate

I assume that your husband is named as executor of the estate of the deceased, Bonnie. An executor (or estate trustee) is typically named in a will, but it can apply to the court to be appointed if there is no will.

It is the responsibility of the executor to pay all debts (including funeral and testamentary expenses), inheritance (plus succession duties), taxes, as well as other related liabilities of the deceased in Canada and abroad. If the estate has more liabilities than assets, the estate could be considered insolvent.

Creditors are to be paid in a particular order, and the executor can be personally liable for not adhering to the correct sequence. That said, neither the executor nor the beneficiaries needs to personally pay off the debts of the deceased if the estate is insolvent.

I assume the estate in question, Bonnie, has more assets than liabilities, but there is just a bit of a cash crunch, particularly related to costs that need to be paid imminently.

If an estate includes real estate or cash or investments at a financial institution, typically the executor must apply for a grant of probate to prove they have legal authority to deal with these assets. In order to obtain probate, an executor must typically pay the probate fees or estate administration tax as part of the probate application.

Fortunately, an executor can request funds from a bank to pay expenses like probate fees before obtaining probate. The same advances can be made for other bills, like the outstanding debt you’ve mentioned.

When cash is not part of the estate

However, since the estate your husband is handling has no cash and only real estate, Bonnie, it does make things a bit more difficult. He may be able to approach the beneficiaries of the estate to ask them to front the cash required to pay the bills and probate. These funds would be reconciled and paid back to them before determining their share of the estate.

Your husband could also pay the expenses himself and, likewise, could reimburse himself once cash becomes available.


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