New Small Estates procedures - An update in the field of Estate Administration

The field of estates in Ontario has been long overdue for an update or at least some changes to address the complaints that administering estates takes too long or is too expensive.

With the introduction of the Smarter and Stronger Justice Act 2020, there are some changes that have been introduced that aim to modernize and (hopefully) improve access to the justice system, particularly in the area of estates.

The Smarter and Stronger Justice Act 2020 introduced changes to the Estates Act, which came into force on April 1, 2021. These changes introduced a new Small Estates rule-

74.1 under the current Rules of Civil Procedure, which among other civil matters direct certain procedures involved in the administration of estates in Ontario.

Estates Act

A small estate is now defined as an estate valued under $150,000.

Rules of Civil Procedure

Under the Rules of Civil Procedure, an individual looking to receive confirmation of their authority to act as an administrator or executor of the small estate of a deceased person can now apply for a ‘Small Estate Certificate’ instead of a ‘Certificate of Appointment of Estate Trustee’. This change will ideally streamline the process for smaller estates that might otherwise not be administered due to the perception of high cost and inconvenience relative to the size of the estate.

The application under the ‘Small Estate’ route involves filing an application for small estate certificate, proof of death, an original will (if applicable) along with proof of due execution such as an affidavit of execution of one of the witnesses. All persons entitled to a share in the estate must also be notified of the application and provided with a copy of the will. The application may not be filed until 30 days after complying with this notice requirement.

It is a more condensed application compared with the ordinary procedure of obtaining a Certificate of Appointment of Estate Trustee, however the certificate itself for a Small Estate does require a list of all assets to be listed because the trustee will be limited to administering only those specific assets. This is a significant difference from a Certificate of Appointment. Though not necessarily a bad thing, if the applicant discovers other assets outside of those specified in the Small Estate Certificate after having obtained it, which results in an estate valued in excess of $150,000, the applicant will need to pursue the ordinary route of obtaining a Certificate of Appointment. This may result in further delay and higher costs so it is important that an applicant ensures they make careful inquiries about the assets of the estate.

Under the ordinary procedure, applicants for certificates of appointment in certain situations may be asked to post security called an ‘administrative bond’, which can be up to double the value of the estate. In a small estate application, this requirement does not apply as long as there are no minors or beneficiaries under disability.

The introduction of these changes will hopefully result in speedier administration of small estates at a lower cost. The goal is that an estate that would otherwise be left unsettled would instead be divided among the intended beneficiaries named in the will of the deceased or the next-of-kin if there is no will instead of potentially being transferred to the government.

As always, it is recommended that potential executors/administrators for any estate, whether it is large or small, seek advice from a lawyer specialized in this area to understand their rights and obligations.

If you have any questions regarding this article or any estate administration matter, please do not hesitate to contact our the KMB Business and Succession team.

Daniela Fonseca 905-276-0415
dfonseca@kmblaw.com