A Guarantee is a formal commitment to pay someone else's debt or obligation if they default. The executor should obtain a copy of the loan and guarantee documentation, and then make a decision as to whether to pay off the debt in full to bring the deceased's obligation to an end, or negotiate with the lender or primary borrower to secure the debt another way.
In the meantime, the guarantee should be recognized in full as a liability in the Inventory.
To do this, ensure that the following information is added to the item:
- The guarantee's current value
- Whether it is separate or joint responsibility (and, if applicable, the percentage the deceased is responsible for)
- Brief description of the guarantee
- Name of the recipient
Note that in Quebec, the guarantee ends on the death of the guarantor. However, the estate is responsible for any debt that was existing as of the date of death.