When does a beneficiary have a property interest in the assets of the estate? Not until the estate trustee says so. 

Property in an estate vests with the estate trustee. The estate trustee holds complete, unfragmented title to the estate in order to permit them to properly administer it. Beneficiaries do not have access to the property that the testator left to them until the estate trustee gives their assent or transfers the property to them. 

The law of assent dictates that an assent is a statement or act of the estate trustee by which the estate trustee indicates that the property is no longer needed to discharge the estate’s debts, expenses or general pecuniary legacies. The effect of the assent is to release the property to the beneficiary. 

The issue arose and the law of assent was considered in the decision of Re Assaly, 2022 ONSC 2219 (CanLII). There, a bankrupt purported to assign his right to his share of an estate to a charitable foundation set up to benefit his children. The bequest was paid to his lawyer, on the condition that the bankrupt provide a letter of credit to the estate. The bankrupt never provided the letter of credit. The estate sought the return of the funds. The bankrupt and the foundation argued that the funds should be paid to them. They asserted the law of assent, arguing that the estate assented to the distribution, and that the funds were therefore beyond the reach of the estate. The court disagreed, holding that the “assent” or distribution was conditional on the provision of the letter of credit. The funds were therefore to be returned to the estate. 

In the Re Assaly decision, the court quotes extensively from Professor Oosterhoff’s lengthy and detailed paper, “Locus of Title in an Unadministered Estate and the Law of Assent” (October 2017), and found at 48 Advoc. Q. 41 (2018). There, Professor Oosterhoff states: 

An assent is a statement or act of a personal representative by which he indicates that certain property that forms part of the assets of the estate is not, or is no longer needed to discharge the estate’s debts, funeral expenses, or general pecuniary legacies. The effect of the assent is to release the property to the beneficiary to whom it was left in the will. This suggests, therefore, that until the assent is given, the beneficiary’s title is incomplete. And this is, indeed so. For the personal representative holds the complete, unfragmented title to the estate to permit him property to administer it. Thus, the beneficiaries do not have access to the property the testator left to them in her will until the personal representative gives his assent or transfers the property to them. 

The law of assent was referred to in the decision of Bank of Nova Scotia Trust Company v. Charles, 2012 ONSC 1361 (CanLII). There, the court held that a beneficiary could not use his share of the estate to purchase real property from the estate because the share of the estate did not belong to him yet as the estate trustee did not assent to the distribution.  

Thank you for reading. 

Paul Trudelle