If there is one axiom in succession law, it is that the role of a liquidator is complex and thankless. Liquidators, even those acting with the best of intentions, may now have yet another reason to lose sleep at night: the prospect of a universal legatee bringing proceedings before the courts on the grounds that they failed to account for the latent tax liability attached to an asset attributed to that legatee.

This is precisely what occurred in Noël v. Birk, 2026 QCCS 187, argued before the Superior Court by our colleague, Me Daniel Lessard.

The second paragraph of article 851 of the Civil Code of Québec has always been unequivocal: a liquidator may take tax consequences into account when allocating assets in the composition of shares. However, in light of the decision rendered in Noël and the commentaries cited in the Court's reasons, one may well ask whether this mere faculty has not now become a formal obligation for liquidators.

In Noël — where the second paragraph of article 851 of the Civil Code of Québec appears to have been interpreted for the very first time — the Court partially upheld the position of one of the three universal legatees of the estate, namely the deceased's spouse, who had refused the three-share partition proposed by the liquidator. That refusal was grounded in the fact that the composition of the shares failed to account for the tax burden inherent in one of the assets — a RRIF, in this case — which the liquidator had included, at the spouse's request, in the composition of the lot intended for her. The liquidator had acted in good faith and sought to have the estate benefit from the rules governing rollovers to a surviving spouse.

The Court ultimately ordered the liquidator to prepare a new partition proposal and exercised the power conferred upon it by article 854 of the Civil Code of Québec to order the appointment of an independent tax expert, tasked in particular with determining the latent tax liability attached to the RRIF in dispute.

Wills frequently contain provisions directing the liquidator to take all steps necessary to minimize the tax burden of the deceased and of the estate. Rollover rules to the surviving spouse are commonly used by liquidators for this purpose. However, assets rolled over to the spouse often carry with them a latent tax liability for the spouse-legatee.

Liquidators must therefore exercise heightened caution in the administration of the estate and the composition of shares. The succession law and tax teams at LJT Avocats are available at any time to provide practical and informed guidance.