Liquidation of succession
LIQUIDATION OF SUCCESSIONS
OBJECT OF LIQUIDATION AND SEPARATION OF PATRIMONIES
776. The liquidation of an intestate or testate succession consists in identifying and calling in the successors, determining the content of the succession, recovering the claims, paying the debts of the succession, whether these be debts of the deceased, charges on the succession or debts of support, paying the legacies by particular title, rendering an account and delivering the property.
777. The liquidator exercises, from the opening of the succession and for the time necessary for liquidation, the seisin of the heirs and the legatees by particular title.
The liquidator may even claim the property against the heirs and the legatees by particular title.
The designation or replacement of the liquidator of the succession is published in the register of personal and movable real rights and, where applicable, in the land register. Registration of the act of designation or replacement is obtained by presenting a notice which refers to the act of designation or replacement, identifies the deceased and the liquidator and contains the description of the immovables concerned, if any.
778. The testator may modify the seisin, powers and obligations of the liquidator and provide in any other manner for the liquidation of his succession or the execution of his will. However, a clause that would in effect restrict the powers or obligations of the liquidator in such a manner as to prevent an act necessary for liquidation or to exempt him from making an inventory is deemed unwritten.
779. Where the succession is manifestly solvent, the heirs may, by mutual agreement, liquidate it without following the prescribed rules for liquidation. As a result of this decision, they are liable for payment of the debts of the succession from their own patrimony, even where the debts exceed the value of the property they take.
780. The patrimony of the deceased is separate from that of the heir by operation of law until the succession has been liquidated.
The separation has effect with regard to both the creditors of the succession and the creditors of the heir or of the legatee by particular title.
781. The property of the succession is used to pay the creditors of the succession and to pay the legatees by particular title, in preference to any creditor of the heir.
782. The property of the heir is used to pay the debts of the succession only in the case where the heir is liable for debts of greater value than the property he takes and the property of the succession is insufficient.
In that case, payment of the creditor of the succession is made only after payment of the creditor of each heir whose claim arose before the opening of the succession. However, a creditor of the heir whose claim arose after the opening of the succession is paid concurrently with the unpaid creditors of the succession.
LIQUIDATOR OF THE SUCCESSION
DESIGNATION AND RESPONSIBILITIES OF THE LIQUIDATOR
783. Any person fully capable of exercising his civil rights may hold the office of liquidator.
A legal person authorized by law to administer the property of others may hold the office of liquidator.
784. No one is bound to accept the office of liquidator of a succession unless he is the sole heir.
785. The office of liquidator devolves by operation of law to the heirs unless otherwise provided by a testamentary provision; the majority of the heirs may designate the liquidator and provide the mode of his replacement.
786. A testator may designate one or several liquidators; he may also provide the mode of their replacement.
A person designated by a testator to liquidate the succession or execute his will has the quality of liquidator whether he was designated as administrator of the succession, testamentary executor or otherwise.
787. Persons holding the office of liquidator together shall act in concert, unless exempted therefrom by the will or, in the absence of a testamentary provision, by the heirs.
If one of the liquidators is prevented from acting, the others may perform alone acts of a conservatory nature and acts requiring dispatch.
788. The court may, on the application of an interested person, designate or replace a liquidator failing agreement among the heirs or if it is impossible to appoint or replace the liquidator.
789. The liquidator is entitled to the reimbursement of the expenses incurred in fulfilling his office.
He is entitled to remuneration if he is not an heir; if he is an heir, he may be remunerated if the will so provides or the heirs so agree.
If the remuneration was not fixed by the testator, it is fixed by the heirs or, in case of disagreement among the interested persons, by the court.
790. The liquidator is not bound to take out insurance or to furnish other security guaranteeing the performance of his obligations, unless the testator or the majority of the heirs require it or the court orders it on the application of any interested person who establishes the need for such a measure.
If a liquidator required to furnish security fails or refuses to do so, he forfeits his office, unless the court relieves him of his default.
791. Any interested person may apply to the court for the replacement of a liquidator who is unable to assume the responsibilities of his office, who neglects his duties or who does not fulfil his obligations.
During the proceedings, the liquidator continues to hold office unless the court decides to designate a provisional liquidator.
792. Where the liquidator is not designated, delays to accept or decline the office or is to be replaced, any interested person may apply to the court to have seals affixed, an inventory made, a provisional liquidator appointed or any other order rendered which is necessary to preserve his rights. These measures benefit all the interested persons but create no preference among them.
The costs of inventory and seals are charged to the succession.
793. Acts performed by a person who, in good faith, believed he was liquidator of the succession are valid and may be set up against anyone.
INVENTORY OF THE PROPERTY
794. The liquidator is bound to make an inventory, in the manner prescribed in the Title on Administration of the Property of Others.
795. Closure of the inventory is published in the register of personal and movable real rights by registration of a notice identifying the deceased and indicating the place where the inventory may be consulted by interested persons.
The notice is also published in a newspaper circulated in the locality where the deceased had his last known address.
796. The liquidator informs the heirs, the successors who have not yet exercised their option, the legatees by particular title and the known creditors of the registration of the notice of closure and of the place where the inventory may be consulted, and transmits a copy of the inventory to them if that can easily be done.
797. The creditors of the succession, the heirs, the successors and the legatees by particular title may contest the inventory or any item in it; they may also agree to a revision of the inventory or request a new inventory.
798. Where an inventory has already been made by an heir or another interested person, the liquidator shall verify it. He shall also ascertain that the notice of closure has been registered and that everyone who should have been informed has been informed.
799. The liquidator may be exempted from making an inventory, but only with the consent of all the heirs and successors.
If they give their consent, the heirs, and the successors having by that fact become heirs, are liable for the debts of the succession that exceed the value of the property they take.
800. Where the heirs, knowing that the liquidator refuses or neglects to make the inventory, themselves neglect, within 60 days following the expiry of the six-month period for deliberation, to proceed with the inventory or to apply to the court to have the liquidator replaced or for an order to have him proceed with the inventory, they are liable for the debts of the succession that exceed the value of the property they take.
801. Heirs who, before the inventory, mingle the property of the succession with their personal property, unless the property was already mingled before the death, such as in the case of cohabitation, are likewise liable for the debts of the succession that exceed the value of the property they take.
If the mingling is done after the inventory but before the end of the liquidation, they are personally liable for the debts up to the value of the mingled property.
FUNCTIONS OF THE LIQUIDATOR
802. The liquidator acts with respect to the property of the succession as an administrator of the property of others charged with simple administration.
803. The liquidator shall make a search to ascertain whether the deceased made a will.
If the deceased made a will, the liquidator causes the will to be probated and takes all the necessary steps for its execution.
804. The liquidator administers the succession. He realizes the property of the succession to the extent necessary to pay the debts and the legacies by particular title.
To do this, he may alienate, alone, movable property that is perishable, likely to depreciate rapidly or expensive to preserve. He may also alienate the other property of the succession with the consent of the heirs or, failing that, the authorization of the court.
805. A liquidator who has an action to bring against the succession gives notice thereof to the Minister of Revenue. The latter acts by virtue of his office as liquidator ad hoc, unless the heirs or the court designate another person.
806. If the liquidation takes longer than one year, the liquidator shall, at the end of the first year, and at least once a year thereafter, render an annual account of management to the heirs, creditors and legatees by particular title who have not been paid.
807. Where the succession is manifestly solvent, the liquidator, after ascertaining that all the creditors and legatees by particular title can be paid, may pay advances to the creditors of support and to the heirs and legatees by particular title of sums of money. The advances are imputed to the shares of those who receive them.
PAYMENT OF DEBTS AND OF LEGACIES BY PARTICULAR TITLE
PAYMENTS BY THE LIQUIDATOR
808. If the property of the succession is sufficient to pay all the creditors and all the legatees by particular title and if provision is made to pay the claims that are the subject of proceedings, the liquidator pays the known creditors and known legatees by particular title as and when they present themselves.
The liquidator pays the ordinary public utility bills and pays the outstanding debts as and when they become due or according to the agreed terms and conditions.
809. The liquidator pays, in the same manner as any other debt of the succession, the compensatory allowance to the surviving spouse and any other claim resulting from the liquidation of the patrimonial rights of the married or civil union spouses, as agreed between the heirs, the legatees by particular title and the spouse or, failing such agreement, as determined by the court.
810. Where the succession is not manifestly solvent, the liquidator may not pay the debts of the succession or the legacies by particular title until the expiry of 60 days from registration of the notice of closure of inventory or from the exemption from making an inventory.
The liquidator may pay the ordinary public utility bills and the debts in urgent need of payment before the expiry of that time, however, if circumstances require it.
811. If the property of the succession is insufficient, the liquidator may not pay any debt or legacy by particular title before drawing up a full statement thereof, giving notice to the interested persons and obtaining homologation by the court of a payment proposal which contains a provision for a reserve, if appropriate, for the payment of any potential judgment.
812. Where the property of the succession is insufficient, the liquidator, in accordance with his payment proposal, first pays the prior or hypothecary creditors, according to their rank; next, he pays the other creditors, except with regard to their claims for support, and, if he is unable to repay them fully, he pays them in proportion to their claims.
If property remains after the creditors have been paid, the liquidator pays the creditors of support, in proportion to their claims if he is unable to pay them fully, and he then pays the legatees by particular title.
813. The liquidator may alienate property bequeathed as legacies by particular title or reduce the legacies by particular title if the other property of the succession is insufficient to pay all the debts.
The alienation or reduction is effected in the order and in the proportions agreed by the legatees. Failing agreement, the liquidator first reduces the legacies not having preference under the will nor involving certain and determinate property, in proportion to their value. Where the property is still insufficient, he alienates the subjects of legacies of certain and determinate property, then the subjects of legacies having preference, or reduces such legacies in proportion to their value.
The legatees may always agree to another mode of settlement or be relieved by giving back their legacies or equivalent value.
814. If the property of the succession is insufficient to pay all the legatees by particular title, the liquidator, in accordance with his payment proposal, first pays those having preference under the will and then the legatees of certain and determinate property. The other legatees then have their legacies reduced proportionately, and the remainder is partitioned among them in proportion to the value of each legacy.
ACTION OF CREDITORS AND LEGATEES BY PARTICULAR TITLE
815. Known creditors and legatees by particular title who have been omitted in the payments made by the liquidator have, in addition to their action in liability against the liquidator, an action against the heirs who have received advances and against the legatees by particular title paid to their detriment.
Subsidiarily, the creditors also have an action against the other creditors in proportion to their claims, taking into account the causes of preference.
816. Creditors and legatees by particular title who, remaining unknown, do not present themselves until after the payments have been regularly made have no action against the heirs who have received advances and against the legatees by particular title paid to their detriment unless they prove that they had a serious reason for not presenting themselves in due time.
In no case do they have an action if they present themselves after the expiry of three years from the discharge of the liquidator, or any preference over the personal creditors of the heirs or legatees.
817. Where the reserve provided for in a payment proposal is insufficient, the creditor has, for the payment of his share of the outstanding claim, an action against the heirs who have received advances and legatees by particular title up to the amount they received and, subsidiarily, an action against the other creditors, in proportion to their claims, taking into account the causes of preference.
818. A hypothecary creditor who has an outstanding claim retains, in addition to his personal action, his hypothecary rights against the person who received the hypothecated property.
END OF LIQUIDATION
ACCOUNT OF THE LIQUIDATOR
819. Liquidation is complete when the known creditors and the known legatees by particular title have been paid or when payment of their claims and legacies is otherwise settled or assumed by heirs or legatees by particular title. It is also complete when the assets are exhausted.
It ends by the discharge of the liquidator.
820. The object of the final account of the liquidator is to determine the net assets or the deficit of the succession.
The final account indicates the debts and legacies left unpaid, those guaranteed by security or assumed by heirs or legatees by particular title and those whose payment is settled otherwise, specifying the mode of payment for each. Where applicable, it establishes the reserves needed for the satisfaction of potential judgments.
The liquidator shall append a proposal for partition to his account if that is required by the will or the majority of the heirs.
821. The liquidator, at any time and with the concurrence of all the heirs, may render an amicable account. The cost of rendering the account is borne by the succession.
If an amicable account cannot be rendered, the account is rendered in court.
822. After acceptance of the final account, the liquidator is discharged of his administration and delivers the property to the heirs.
Closure of the account is published in the register of personal and movable real rights by registration of a notice identifying the deceased and indicating the place where the account may be consulted.
OBLIGATIONS OF HEIRS AND LEGATEES BY PARTICULAR TITLE AFTER LIQUIDATION
823. The sole heir to a succession is liable, up to the value of the property he takes, for all the debts not paid by the liquidator. However, the creditors and legatees by particular title who do not present themselves until after the payments have been regularly made have no preference over the personal creditors of the heir.
Where a succession devolves to several heirs, each of them is liable for the debts only in proportion to the share he receives as an heir, subject to the rules governing indivisible debts.
824. The legatee by general title of a usufruct is solely liable to the creditors for the debts left unpaid by the liquidator, even for the capital, proportionately to what he receives, and also for hypothecs charged on any property he has received.
The relative contributions of the legatee by general title of the usufruct and of the bare owner to the debts are determined according to the rules prescribed in the Book on Property.
825. The legatee by general title of a usufruct of the entire succession is, without recourse against the bare owner, liable for payment of any annuities or support established by the testator.
826. The heirs are liable, as in the case of payment of the debts, for payment of the legacies by particular title left unpaid by the liquidator, but never for more than the value of the property they take.
If a legacy is imposed on a specific heir, however, the action of the legatee by particular title does not lie against the others.
827. The legatees by particular title are liable for payment of the debts and legacies left unpaid by the liquidator only where the property devolving to the heirs is insufficient.
Where a legacy by particular title is made jointly to several legatees, each of them is liable for the debts and legacies only in proportion to his share in the bequeathed property, subject to the rules on indivisible debts.
828. When a legacy by particular title includes a universality of assets and liabilities, the legatee is solely liable for payment of the debts connected with the universality, subject to the subsidiary action of the creditors against the heirs and the other legatees by particular title where the property of the universality is insufficient.
829. An heir or a legatee by particular title who has paid part of the debts and legacies in excess of his share has an action against his coheirs or colegatees for the reimbursement of the excess over his share. His action lies, however, only for the share that each of them ought to have paid individually, even if he is subrogated to the rights of the person who was paid.
830. If one of the coheirs or colegatees is insolvent, his share in the payment of the debts or in the reduction of the legacies is divided among his coheirs or colegatees in proportion to their respective shares, unless one of the coheirs or colegatees agrees to bear the entire amount.
831. A usufruct established on bequeathed property is borne without recourse by the legatee of the bare ownership.
Similarly, a servitude is borne without recourse by the legatee of the property charged with it.
832. Where the rights of action of the unpaid creditors or legatees by particular title are exercised before partition, account shall be taken, in the composition of the shares, of the actions of the heirs or legatees against their coheirs or colegatees for the amounts they paid in excess of their shares.
Where the rights of action of the unpaid creditors or legatees are exercised after partition, those of the heirs or legatees who paid more than their share are exercised, where such is the case, according to the rules applicable to the warranty of co-partitioners, unless the act of partition stipulates otherwise.
833. The testator may change the manner and proportion in which the law holds his heirs and legatees by particular title liable for payment of the debts and imposes reduction of the legacies on them.
The changes may not be set up against the creditors; they have effect only between the heirs and the legatees by particular title.
834. An heir having assumed payment of the debts of the succession beyond the value of the property he takes or being liable for them may be held liable on his personal property for his share of the debts left unpaid.
835. An heir having assumed payment of the debts of the succession or being liable for them under the rules of this Title may, if he was in good faith, apply to the court to have his obligation reduced or his liability limited to the value of the property he has taken if new circumstances substantially change the extent of his obligation, including, but not limited to, his discovery of new facts, or the coming forward of a creditor of whose existence he could not have been aware when he assumed the obligation.
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