Loans due to the deceased are passed on to the succession. The executor is therefore responsible for collecting all loans due to the deceased.
This Inventory item should include the following information at the date of death:
- Principal amount due
- Name of the borrower
- Any accrued interest (ie, accrued but not yet paid as of the date of death)
- The annual interest rate
- Details on any security put in place
- The term date
Most loans will be a Promissory Note.
An Agreement for Sale (Instalment Sale in Quebec), on the other hand, is a rarely used contract where the buyer agrees to pay the purchase price of a property over time. During the course of the loan, the seller maintains the title of the land, but on full payment, the seller is obliged to transfer the title to the buyer.
The estate may wish to negotiate with debtors to accelerate the repayment of loans due (and therefore accelerate the succession process), with the heirs' approval. This and any loan and interest payments should be included in the Estate Accounting section.