Tag: certificate of appointment
As Ian Hull and Daniel Enright of our office blogged last week, as of April 1, 2021, small estates in Ontario will be defined as those worth $150,000.00, instead of the $50,000.00 figure we are all used to.
The Ontario Attorney General, Doug Downey, advised that the process of applying to manage an estate in Ontario was the same, whether it is worth $10,000.00 or $10 million, which often deters people from claiming smaller estates.
As a result of this change, more estates will be able to access a simplified probate process, though the amount of probate fees payable will not change.
Although these changes are welcome, some consider that there are still a number of other issues outstanding, such as:
- Due to real estate values, estates in Toronto could be considered small, whereas that would not be the case in other parts of the province (e.g. a $500,000.00 estate in Toronto could be considered small); and
- The probate process itself could be simplified, as many financial institutions take the position that assets cannot be managed until such time as probate is obtained (which in turn can often cost an estate, as asset values fluctuate).
A recent article discussing the above-noted points can be found here.
It will certainly be interesting to see if the new changes will make a difference, and whether more changes are coming, in light of the concerns expressed by various members of the legal profession.
Thanks for reading!
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Re Crowley Estate, 2021 ONSC 582, raises an interesting question surrounding the potential impact of counsel missing a procedural deadline in association with a Notice of Objection to the issuance of a Certificate of Appointment (i.e. probate), and whether missing such a deadline is fatal to the Objector’s ability to generally proceed with a challenge to the Will.
The Notice of Objection process is governed by rule 75.03 of the Rules of Civil Procedure. It generally provides that at any time before the issuance of a Certificate of Appointment any individual who appears to have a financial in the estate may file a “Notice of Objection” to the issuance of a Certificate of Appointment. The impact of filing of the Certificate of Appointment is to in effect to pause the probate process, with the applicant Estate Trustee being required to vacate and/or deal with the Notice of Objection before probate can be issued. The process by which the Notice of Objection is generally dealt with is that upon being advised of the Notice of Objection the Estate Trustee is to serve a “Notice to Objector” upon the Objector in accordance with rule 75.03(4), which then provides the Objector with 20 days from the date on which they are served with the Notice to Objector to serve and file a “Notice of Appearance”. If the Notice of Appearance is served by the deadline, the matter proceeds to a motion for directions in accordance with rule 75.03(6), where the court would be asked to provide directions regarding how the objections that were raised are to be adjudicated before the court. If no “Notice of Appearance” is filed by the deadline the Notice of Objection is automatically vacated, and the probate application may proceed as if no Notice of Objection had been filed.
In Re Crowley Estate, the Objector filed a Notice of Objection to the issuance of probate, and was in turn served with a Notice to Objector by the Applicant. The date on which the Objector was served with the Notice to Objector was November 20, 2020, which would have resulted in a deadline of December 10, 2020 for the Objector to serve the Notice of Appearance. The Notice of Appearance was not served however by the Objector until December 15, 2020. The matter was directed by the Registrar to a Judge, who in turn asked the parties to make written submissions regarding the matter. The Applicant’s lawyer took the position that rule 75.03 was “unforgiving” with respect to its deadlines, and that as the Objector had missed the deadline to serve the Notice of Appearance the court was now required to proceed with the probate application as if no Notice of Objection had been filed. Objector’s counsel advised that the reason for the missed deadline was due to health related concerns surrounding COVID-19, appearing to note in any event that even if the Notice of Objection was vacated the Objector would be proceeding with a challenge to the validity of the Will, noting that the Objector had subsequently commenced a separate Application to address the concerns surrounding the validity of the Will on January 7, 2021.
The court ultimately extended the deadline for the Objector to file the Notice of Appearance under rule 3.02, which allows the court to extend any time prescribed by the rules on such terms as are just. In extending the deadline, Justice Boswell notes that the Objector clearly always intended to pursue the objection, and that there is no clear prejudice to allowing the extension. Perhaps interestingly however, although the comment does not appear to have played a decisive role in the final ruling, Justice Boswell references that even if the Certificate of Appointment was issued the Objector would likely have been at liberty to seek the return the Certificate of Appointment under rule 75.05, appearing to give credence to the Objector’s position that they would have been at liberty to proceed with their challenge to the validity of the Will regardless of the missed deadline for the Notice of Objection.
Thank you for reading.
In recent months, an Ontario Superior Court of Justice province-wide Notice to the Profession has permitted the filing of applications for a Certificate of Appointment of Estate Trustee with a Will or a Certificate of Appointment of Estate Trustee Without a Will (“probate applications”) by email. Since then, the Rules of Civil Procedure were updated, effective January 1, 2021 to permit for the service of most court materials by email (among other updates).
Most recently, as of January 8, 2021, the Rules of Civil Procedure were further updated to provide for the options of serving notice of probate applications by email, courier, or personal service. Amended sub-rules 74.04(7) and 74.05(5) now read as follows:
Notice under this rule shall be served on all persons, including charities, the Children’s Lawyer and the Public Guardian and Trustee, and, unless the court specifies another method of service, may be served by,
(a) personal service;
(b) e-mail, to the last e-mail address for service provided by the person or, if no such e-mail address has been provided, to the person’s last known e-mail address; or
(c) mail or courier, to the person’s last known address.
Previously, the Rules of Civil Procedure required the Notice of Application in respect of a probate application to be served by regular lettermail.
Forms 74.06 and 74.16 (Affidavits of Service in respect of probate applications) have also now been updated to refer to these new manners of service of the Notice of Application in respect of a probate application. The revised forms are available here.
This further development in the modernization of estates law procedures is welcome and can be expected to better enable lawyers to assist clients in serving and filing probate applications more efficiently while working remotely during the pandemic and beyond.
Thank you for reading.
The reduced hours and filing capabilities of the court during the COVID-19 pandemic have raised some interesting questions surrounding the filing of probate applications. Although the court’s direction to file court materials by mail is likely of no concern for a majority of matters, as a probate application could contain the original executed copy of a Will as well as a potentially significant bank draft for any estate administration tax, you would likely be rightly hesitant to place such documents in the mail under the current circumstances for fear that they may be lost.
The potentially good news for those needing to file probate applications with the Toronto court is that it is our current understanding that the Toronto court is allowing probate applications to be filed in person at the court office daily between the hours of 10:00 am and 12:00 noon, and again from 2:00 pm to 4:00 pm. Although these filing capabilities and times are of course subject to change, at least for the time being those in Toronto appear to be able to file probate applications in person without having to concern themselves with the possibility of the application being lost in the mail. Those needing to file probate applications in jurisdictions outside of Toronto should check to see if they too are making an exception to allow probate applications to be filed in person and not by mail.
In the event that it does not appear that it will be possible to file the probate application in person, such that the probate application would likely need to be filed by mail, the individual wishing to file the probate application should seriously consider whether there is an urgent need to file the probate application or whether it could wait until the courts have fully re-opened. If you are advising a client in such a situation, you should clearly explain what would happen in the event that the original Will was lost, and that an application to prove a copy of the lost will would be necessary (together with the added time and expense). Although the presumption that the lost will was destroyed by the testator with an intention of revoking it could likely easily be overcome by the fact that the possession of the Will could be traced to after the testator’s death, there would still be added time and expense of needing to bring the lost will application.
In the event that the client does still decide to proceed with filing the probate application by mail, one way to potentially reduce some of the risk may be to have any probate fees paid by trust cheque from the law firm and not by bank draft. Although in the event that the application materials were lost in the mail the lost will application would likely still be required, at least the concern associated with losing an original bank draft (and potentially the associated funds) is lessened as a trust cheque should more easily be cancelled. Multiple notarial copies of the original Will should also likely be made prior to placing it in the mail.
Thank you for reading and stay safe and healthy.
One of the consequences of having to probate a Will (now referred to in Ontario as applying for a Certificate of Appointment of Estate Trustee) is that the Will, along with the assets covered by the Will, are made public.
I was intrigued to read about the estate of the billionaire co-founder of Microsoft, Paul Allen. In addition to Allen’s Last Will being made public, multiple news articles have published a list of some of the amazing properties owned by him, including a:
- condominium in Portland, Oregon ($700,000 to &850,000)
- 20-acre property in Santa Fee purchased from Georgia O’Keefe’s estate ($15 million)
- 2,066-acre ranch in Utah ($25 million)
- Silicon Valley 22,005 square foot house ($30 million)
- New York City penthouse on 4 East 66th Street ($50 million)
- double property in Idaho totalling 3,600 acres ($50 million)
- 3 acre compound on the Big Island in Hawaii ($50 million)
- 18 bedroom mansion in the South of France ($100 million)
- 387 acre camp in Lopez Island, Washington ($150 million)
- 8 acres of land on Mercer Island, Washington ($130 million)
- 400 foot Octopus Yacht (up to $130 million)
While I have no intention to address the efficacy of Allen’s estate plan, I thought the publicity of his estate provides a reminder that careful estate planning can ensure that privacy is maintained, and the payment of probate tax be avoided. In Ontario, there are numerous options available including preparing a secondary (or tertiary) Will, placing assets in joint ownership with the right of survivorship, or simply gifting assets prior to death. This is by no means an exhaustive list, and each option carries certain advantages and disadvantages.
While I expect that few people have the impressive catalogue of properties that Allen had, it should by no means preclude careful estate planning.
Thanks for reading!
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We have previously blogged on the various ways that an estate trustee may be removed and/or replaced. Examples include scenarios where an estate trustee dies in the midst of administering an estate, or renounces from his or her position, or where an estate trustee is removed by court order.
Ontario legislation provides guidance for beneficiaries and estate trustees in the aforesaid circumstances. Ontario legislation does not, however, specifically address what to do if an estate trustee is deemed mentally incapable to administer an estate, either before or after probate is granted. For more information on what mental incapacity is, and how to address mental incapacity, click here.
If an estate trustee is deemed mentally incapable, the first question to consider is how far along they were in the administration of the estate.
If the estate trustee has not yet applied for a certificate of appointment of estate trustee with a will (hereinafter referred to as the certificate of appointment of estate trustee), then another person may apply for a certificate of appointment of estate trustee in their place. A person acting under a valid continuing power of attorney for property for the mentally incapable estate trustee may renounce and consent (as appropriate) for the estate trustee. If the incapable individual has not appointed an attorney for property, then their statutory or court appointed guardian assumes this responsibility. Where the will names an alternate estate trustee in the event the estate trustee is unable to act, the alternate should be contacted to discuss whether they are willing and able to assume this role.
In circumstances where an estate trustee has been declared mentally incapable of administering an estate after the certificate of appointment of estate trustee has been issued, any person appearing to have a financial interest in the estate may bring a notice of application for the removal and replacement of the estate trustee. Again, the incapable estate trustee’s power of attorney or statutory or court appointed guardian would likely be involved in this process. Once a court order for removal and replacement is obtained, the replacement estate trustee may apply for a Court Status Certificate of Appointment of Estate Trustee with a Will pursuant to Rule 74 of the Rules of Civil Procedure.
Thank you for reading!
A recent decision of the Human Rights Tribunal reiterates the necessity of obtaining a Certificate of Appointment of Estate Trustee, with or without a Will, in order to be allowed to continue with a human rights compliant before the Ontario Human Rights Tribunal.
In Pollard v. York Condominium Corporation, 2018 HRTO 1149 (CanLII), the Applicant alleged discrimination on the basis of disability. The Applicant was fired from his employment as a superintendent, allegedly on the basis that he was absent from work due to a disability. The Applicant later died, and the Respondent applied for an Order dismissing the Application because no Certificate of Appointment of Estate Trustee had been obtained. The deceased Applicant’s wife sought to continue the Application.
The Human Rights Tribunal reviewed case law to the effect that an application under the Human Rights Code cannot proceed without the formal appointment of an Estate Trustee.
Rather than dismiss the Application, the Human Rights Tribunal allowed the Applicant’s wife six months to obtain a Certificate of Appointment. If no Certificate was obtained within that time, the Application was to be dismissed.
The requirement of a Certificate of Appointment can cause significant hardship for an applicant. They must incur the costs of applying for the Certificate. In many cases, the estate has no assets: either because it is impecunious or because the assets pass outside of the estate. In other cases, the estate would have to pay Estate Administration Tax that might not otherwise be payable.
There is a similar requirement to obtain a Certificate of Appointment in order to continue other civil litigation: see David Smith’s blog, here.
Have a great long weekend.
Usually a Will challenge takes place after the initial application for probate. Where probate has already issued, a Will challenge may still commence (within the limitations period). A first step is “calling in” the Certificate of Appointment through a motion under sub-rule 75.05 of the Rules of Civil Procedure or an application under sub-rule 75.04 [the former deals squarely with Will challenges, the latter speaks to other considerations].
A recent case before the Trial Division of the Supreme Court of Newfoundland and Labrador explores the criteria for revocation of the already-issued Certificate. In Coombs v. Walsh (Estate), 2017 NLTD(G) 83, Justice Goulding reviewed the jurisprudence on point extensively and held as follows:
“…I am satisfied that the standard is whether there is a genuine issue to be tried and not the higher standard of whether there is a reasonable prospect of success. However, the threshold is not so low that mere suggestion or conjecture or evidence on peripheral points will suffice. As stated, there must be probative evidence which is material to the issues raised which has not been fully answered with uncontradicted evidence by the propounder of the Will” [emphasis added.]
Hence, there is both a legal and evidential burden that must be met. At the end of the day, the Court must balance the interest in maintaining the efficient administration of the Estate with considerations that would not allow revocation of the existing Certificate of Appointment to be used merely as a tool of obstruction.
The discussion in Walsh Estate is an easy and interesting read and I happily commend it to you for review.
Have a nice weekend everyone!
In Ontario, it is trite law that an estate trustee of a testate estate derives his or her powers from the Will of the deceased. Accordingly, unlike an intestate estate, it is not always necessary for an estate trustee to obtain a Certificate of Appointment of Estate Trustee with a Will (“probate”) in order to administer an estate.
However, in certain matters it is necessary for an estate trustee to obtain probate before being able to represent the estate, regardless of whether there is a valid Will. The 2000 decision of Justice Haley in Carmichael Estate (re) succinctly sets out the three instances where probate is required:
- Third parties dealing with the executor may require probate in order to accept the authority of the Will. Justice Haley provides the example of a debtor who wishes to ensure that the proper person is being paid in order to satisfactorily discharge the debt.
- Proceedings where the executor represents the estate as plaintiff or as defendant. Here, Justice Haley notes that the Court will require probate in order to satisfy an evidentiary matter pursuant to section 49 of the Evidence Act.
- Where a foreign estate trustee intends to establish his rights in Ontario, letters probate must be resealed (referred to as ancillary letters probate).
In Re Carmichael Estate, the respondents sought to include a fourth category requiring probate – the removal of an executor under section 37(1) of the Trustee Act. The Court held, however, that an applicant is free to bring a removal application regardless of whether probate has been granted and whether the estate trustee has acted in the administration.
Re Carmichael Estate a decision well worth reading for all history buffs given Justice Haley’s excellent historical analysis of the English common law Courts relating to probate and estates from the 11th century onwards.
When a life insurance policy’s designated beneficiary is the estate of the policy-holder, the proceeds of the insurance policy will be paid into the deceased’s estate. Usually, the value of the life insurance proceeds are included in the value of the estate when applying for a Certificate of Appointment of Estate Trustee. But there may be a case for not including them.
The Ministry of Finance takes the position that the “total value of the estate is all of the assets owned by the deceased at the time of death, including…insurance, if proceeds pass through the estate, e.g., no named beneficiary other than ‘Estate’.” However, the Estate Administration Tax Act, 1998, S.O. 1998, c. 34 defines ‘value of the estate’ as “all the property that belonged to the deceased person at the time of his or her death”.
Therefore, some have suggested that there can be an argument made that, at the time of the deceased person’s death, they did not actually own the proceeds from the insurance policy. Rather, they owned the contract of insurance. The proceeds are only payable after death and therefore cannot be in the deceased person’s possession when they die. Whether this argument would succeed is uncertain, but it does raise an interesting question of a conflict between the clear wording of a statute and Ministry policy.
Considering that, as discussed in this Toronto Star article, Ontario has the highest estate tax in Canada, the issue of what is and is not to be included in someone’s estate for the purpose of determining the amount of estate administration tax is not insignificant. Currently, the rate of estate administration tax is $5 per $1,000 of the first $50,000 of an estate, and then increases to $15 for each $1,000 after that. Keeping an insurance policy outside of the estate could result in significant tax savings.
Of course, there are other ways to avoid including the value of insurance proceeds in your estate. This includes designating a beneficiary other than the estate. In that case the insurance proceeds would pass entirely outside of the estate and no estate administration tax is payable.
Thanks for reading.