On February 12, 2021, Doug Downey, Attorney General for Ontario announced new measures coming into effect on April 1, 2021 to provide Ontarians with an easier process to administer small estates.
Over the last number of years, we have seen an increase in a Certificate of Appointment of Estate Trustee With a Will (or without a Will) ("Probate") being required for executors to deal with modest assets of the deceased. The current process for obtaining Probate to deal with an estate can be (i) costly and (ii) time consuming depending on the jurisdiction in which the deceased was living at the time of his or her death.
Under The Smarter and Stronger Justice Act1, amendments were made to the Estates Act2 that introduce the concept of "small estate". A small estate is defined in the Estates Act to mean "an estate that does not exceed the amount prescribed by regulations made under subsection (2);" ("Small Estate") and the regulations in turn set the limit for a Small Estate to be anything with a value of $150,000 or less ("Small Estate Amount").
The introduction of new procedures to deal with a Small Estate allows for:
- completing new application forms (see below for a list of the new forms);
- in some circumstances, removing the requirement of the applicant to provide certain supporting documents (an affidavit of service of their notice of application); and
- removing the requirement to post security in most Small Estate probate applications3.
To assist with the administration of a Small Estate, the following new forms have been introduced pursuant to the Rules of Civil Procedure4 (the "Rules"):
- Form 74.1A – Application for a Small Estate Certificate (the "Application")
- Form 74.1B – Request to File an Application for a Small Estate Certificate or an Amended Estate Certificate
- Form 74.1C – Small Estate Certificate (the "Certificate")
- Form 74.1D – Registrar's Notice to Applicant in an Application for a Small Estate Certificate or Amended Small Estate Certificate
- Form 74.1E – Application to Amend Small Estate Certificate
- Form 74.1F – Amended Small Estate Certificate (the "Amended Certificate")
To obtain the Certificate under the Rules, pursuant to rule 74.1.03(1), a person may seek to receive the Small Estate Certificate by filing the Application, together with:
(a) a request to file an application for a small estate certificate or an amended small estate certificate (Form 74.1B);
(b) proof of death;
(c) a draft Certificate (Form 74.1C);
(d) where the deceased died with a will, the original of the will and, if applicable, any codicils, together with the following evidence of due execution of the will and each codicil:
(i) if the will of codicil is not in holograph form;
(A) an affidavit of execution (Form 74.8) of the will or codicil,
(B) if the will or codicil contains an alteration, erasure, obliteration or interlineation that has not been attested, an affidavit as to the condition of the will or codicil at the time of execution (Form 74.10), or
(C) if each of the witnesses to the will or codicil has died or cannot be found, such other evidence of due execution as the court may require, or
(ii) if the will or codicil is in holograph form, an affidavit attesting that the handwriting and signature in the will or codicil are those of the deceased (Form 74.9);
(e) any security required by the Estates Act; and
(f) such additional or other material as the court directs. O. Reg. 111/21, s.8.
There is no longer a requirement for the applicant to swear an Affidavit of Service or prepare the Notice of Application for a Certificate of Appointment of Estate Trustee with a Will (or without a Will). Rather, the applicant is required pursuant to rule 74.1.03(3) of the Rules to "send or give the following documents to each person entitled to a share in the distribution of the estate, including charities and contingent beneficiaries:
- a copy of the Application and of any attachments.
- if there is a will, a copy of the will and of any codicils. O.Reg. 111/21, s. 8."
Under 74.1.03(4) of the Rules, where a minor, who is less than 18 years of age, is entitled to a share in the estate his or her parent or guardian together with the Children's Lawyer are to be sent a copy of the documents outlined in rule 74.1.03(3). The Children's Lawyer is also to be sent a copy of the documents if there are any unborn or unascertained beneficiaries (rule 74.1.03(5)).
If a person is entitled to a share in the estate but has been deemed mentally incapable within the meaning of section 6 of the Substitute Decisions Act, 1992,5 the documents noted in rule 74.1.03(3) are to be sent to: (a) the guardian with authority to act in the proceeding; (b) if there is no guardian with authority to act but there is an attorney under a power of attorney with authority to act in the proceeding; or (c) if the incapable does not have a guardian or an attorney with authority to act, to the Public Guardian and Trustee.
Delivery of the documents set out in 74.1.03(3) of the Rules may be sent by e-mail to the person's last known e-mail address or by regular mail or courier to the person's last known address.
It is important to note that 74.01.03(2) of the Rules provides that the Application may not be filed by the applicant until at least 30 days after the applicant has met the requirements set out in subrules (3) to (7). This will mean that there will be a minor delay in filing the material with the court while the applicant waits out the 30 day period.
What is different with the Application for a Small Estate Certificate from the current application for Probate (Forms 74.4, 74.4.1, 74.5, 74.14, 74.15) is that the applicant will be required to specifically list the assets to which they are seeking the Small Estate Certificate. Those assets are then to be outlined on the Small Estate Certificate issued by the local registrar.
If after the Small Estate Certificate has been issued and additional assets of the estate are discovered which together with the known assets keeps the value under the prescribed Small Estate Amount, the estate trustee named on the Small Estate Certificate may seek to obtain an amended Small Estate Certificate by filing Form 74.1E – Application to Amend Small Estate Certificate (the "Amended Application"), together with the following:
(g) Form 74.1B – Request to File an Application for a Small Estate Certificate or an Amended Estate Certificate;
(h) a copy of the issued Small Estate Certificate;
(i) draft Form 74.1F – Amended Small Estate Certificate, listing the assets in the original Small Estate Certificate, together with the subsequently discovered assets;
(j) any security required by the Estates Act; and
(k) such additional or other material as the court directs. O. Reg. 111/21, s. 8.
As with the Application for a Small Estate Certificate, the applicant will be required to provide all parties who have an interest in the estate with a copy of the Amended Application before they file the Amended Application for the Amended Small Estate Certificate.
If after a Small Estate Certificate or an Amended Small Estate Certificate has been issued, the estate trustee discovers additional assets that exceed the prescribed Small Estate Amount, the estate trustee may bring an application for a certificate of appointment of estate trustee with or without a will under Rule 74.
While these changes to the Estates Act will not change the payment of the applicable Estate Administration Tax on the value of estates exceeding $50,000, we hope that the new changes introduced will reduce the costs for families dealing with the Small Estate of a loved one and will expedite the administration process.
Currently, once Probate has been issued, the estate trustee is required to prepare and file an estate information return with the Ministry of Finance within 180 days of the issuance of Probate. At the current time, it is unclear as to whether an estate information return must be filed by the estate trustee who has been issued a Small Estate Certificate or Amended Small Estate Certificate. We are continuing to monitor any changes to this aspect of the Small Estate administration process.
At Fasken, we understand that dealing with a loved one's estate can be overwhelming, but we want you to know that we are here to help. Please feel free to contact a member of our Trusts, Wills, Estates and Charities group if we can be of assistance in respect of estate administration matters.
1 Smarter and Stronger Justice Act, 2020, S.O. 2020, c. 11 – Bill 161
2 Estates Act, R.S.O. 1990, c. E.21
3 New section 36(3) of the Estates Act provides that "subject to section 6, a bond shall not be required in respect of a small estate, unless, (a) a beneficiary of the estate is a minor; or (b) a beneficiary of the estate is incapable within the meaning of section 6 of the Substitute Decisions Act, 1992 in respect of an issue in the proceeding, whether or not the person has a guardian."
5 Substitute Decisions Act, 1992, S.O. 1992, c. 30
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