Simplified procedures for small estates?

October 13, 2014 Hull & Hull LLP Estate Planning, Executors and Trustees, General Interest 0 Comments

When a person dies in Ontario and leaves a Will, his or her named Estate Trustees often need to obtain a Certificate of Appointment of Estate Trustee (previously known as “probate”) in order to deal with the Estate’s assets.

The Certificate serves as:

  • proof of the deceased’s death;
  • authentication of the propounded Will as the deceased’s last Will (important as a later Will revokes an earlier one); and
  • proof of the authority of the named Estate Trustees to act in accordance with the terms of the Will.

Third parties (like banks, investment institutions and persons buying the deceased’s real or personal property from the Estate Trustees) will often require that the Estate Trustees obtain a Certificate.  The Certificate provides comfort to these third parties and protects them from liability, as it effectively certifies the person(s) with whom they are dealing are authorized to deal with the assets.

The application for a Certificate is made by the Estate Trustee(s) to the Superior Court. When this application is made, a fee (often referred to as a ‘probate fee” or the “estate administration tax”) is payable to the Court. Ontario has the highest probate fees of all the Canadian provinces, starting at $5 per $1,000 for the first $50,000 of the estate assets and $15 per $1,000 thereafter.

Where the value of an estate is relatively small, the cost of obtaining the Certificate is often perceived as prohibitively expensive.  As a result, the Estate Trustees of these small estates often administer the assets without the protection of probate and, in some cases, choose not to administer the estate at all and abandon the assets altogether.

The Law Commission of Ontario (“LCO”) is actively considering whether a simplified procedure for small estates would make sense for Ontario and recently released a Consultation Paper on the issue. The Paper describes Ontario’s existing probate process and compares it to the specialized small estate processes currently being applied in other jurisdictions.

The release of this Consultation Paper, has initiated the public consultation process.  The LCO is currently accepting submissions from the public, including estate representatives, beneficiaries, creditors, financial institutions, policy makers, estate lawyers and anyone else who has been or is involved with Ontario’s probate system. Submissions can be made, formally and informally, until December 11, 2014.

In addition, the LCO has also released a short Questionnaire for Ontarians who have administered what they consider small estates and wish to be involved, but who may not wish to make a formal submission.

With the benefit of this consultation process, the LCO will prepare a final report with recommendations on whether a simplified process would facilitate the administration of small estates in Ontario and, if so, the suggested design for that process.  The LCO will benefit from the responses of the professions and others who have had direct experience with small estates in Ontario.  The submissions are important to the success of the project and we encourage you to share your experience and views with the LCO.

Thank you for reading,

Ian Hull

 

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