Can an executor borrow money on behalf of an estate in Ontario?

An executor generally does not have the implied authority to borrow money on behalf of an estate in Ontario unless the will expressly grants this power or the court provides authorization. Borrowing creates new liabilities for the estate and can expose the executor to personal liability if the debt cannot be repaid.

There may be situations where short-term borrowing appears necessary — for example, if estate expenses (such as mortgage payments on real property or property taxes) are due before assets can be liquidated. In these situations, the executor should first look at whether the existing estate assets can be used to pay these costs, or whether a sale of assets can be accelerated.

If the executor does need to borrow on behalf of the estate, they must make it absolutely clear to any lender that they are acting in their capacity as estate trustee, not personally. Signing a loan agreement without that clarification can make the executor personally bound by the debt. Express authority in the will and legal advice before borrowing are both strongly advisable.