The executor of an estate in British Columbia has many responsibilities, all of them important. One of the key early steps in estate administration involves identifying and settling the debts of the estate. How this is done—and what obligations the executor has to creditors—can sometimes be unclear to people taking on the role.
Understanding Responsibility for the Deceased’s Debt
It’s important to know that a debt cannot be willed or passed on to another individual in the same way that assets can. A debt is the legal responsibility of the person who incurred it. Even if the testator’s spouse survives them, they are not responsible for the debt unless they were a co-signer or joint account holder.
Note: Authorized users on a credit card (such as a spouse or adult child) are not liable for the debt unless their name appears as a co-signer on the credit agreement.
In the case of a credit card, it may be worth checking whether the deceased had balance protection insurance. Some people pay a monthly fee to ensure their balance is covered in the event of death. If not, the credit card company may file a claim against the estate like any other creditor.
The Debt Settlement Process in BC Estates
Before the estate can be distributed to beneficiaries, the executor must:
- Identify all known debts and creditors
- Notify creditors and publish a formal creditor notice (typically in a newspaper or online)
- Use the estate’s liquid assets to settle debts
- Sell assets if needed to raise funds for repayment
Only after all valid debts are paid can the executor distribute the remaining estate assets to beneficiaries.
If the estate runs out of money before all debts are settled, the remaining debt is generally written off. Creditors must be notified and provided with documentation showing that the estate is insolvent.
Executor Liability and Legal Protection
Executors can apply to the court for formal clearance or rely on the process set out in section 122 of the Wills, Estates and Succession Act (WESA) to notify creditors and limit personal liability. If there’s uncertainty about the legitimacy of a debt or the priority in which debts should be paid, consulting a lawyer is highly recommended.
2023 WESA Procedural Update
Recent guidance from BC courts underscores that failure to publish a notice to creditors can increase executor risk. As of 2023, it is best practice to publish notices in both the BC Gazette Online and a regional newspaper to demonstrate a good-faith effort to notify potential creditors.
Get Trusted Support with Estate Debts in British Columbia
Financial matters can be one of the most complex and stressful parts of estate administration. At Fast & Company Law Firm, we help BC executors navigate estate debts, creditor notices, probate, and complex distributions with clarity and confidence.
Book your complimentary consultation with Marie-Louise Fast today at 604-273-6424
last updated: March 2025