Unravelling the mysteries of probate

A crucial step in estate disposition

Of all the questions I am asked about the administration of estates, the one that comes up the most frequently is “what is probate?” If the question is asked by an executor, the next most frequent question is “how do I know if I need probate?” Often clients in their estate planning want to know the answer to this, too. The third most frequent question is “okay, so what’s involved in applying for probate?”

Unfortunately, there is a lack of educational materials available to non-professionals to answer these questions. Fortunately, a knowledgeable estate lawyer can help.

So, what is probate anyway? Probate is the court process by which a will is “proved” in court as a valid document, or where it is confirmed who will administer the estate and who the beneficiaries of the estate are when there is no will. An executor (where a person died with a will) or an administrator (where a person died without a will) applies to court to obtain what is known in Ontario as a “certificate of appointment of estate trustee with/without a will.” In Ontario, executors and administrators are now referred to as “estate trustees” in the court rules.

In a nutshell, a certificate of appointment is the court’s confirmation that the estate trustee is the person who is entitled to administer the deceased person’s estate. It can give legal protection in dealing with the estate trustee or releasing assets to him or her.

For example, the Bank Act (Canada), allows a financial institution to require a certificate of appointment before allowing an estate trustee to deal with assets, and other legislation, such as the Trustee Act (Ontario), provides protection to third parties who rely on a certificate of appointment when dealing with a purported estate trustee even if that certificate is later revoked.

Without this legal protection, a financial institution could be legally liable if, for example, it released bank or investment accounts to an executor who had not probated the will, and then a later will was found naming a different executor.

Because a certificate of appointment protects asset holders from legal liability where the estate trustee’s authority to deal with the estate administration is called into question, most institutional asset holders will require an estate trustee to produce one. The Land Titles legislation in Ontario also requires that an estate trustee obtain an Ontario certificate of appointment before the estate trustee can deal with a deceased person’s Ontario real property.

Exceptions may be made. For example, banks will sometimes “take the risk” where the deceased person’s accounts fall below a certain value (often $50,000). There are certain exemptions allowed by the Land Titles system. Any asset holder can require a certificate of appointment, and in many cases courts have held that such a requirement is not unreasonable.

In certain circumstances, an estate trustee may want a certificate of appointment to protect themselves from claims that the will they are administering is invalid, to start certain limitations periods for claims against the estate running, or to commence or continue litigation. In general, however, an estate trustee will only need a certificate of appointment if an asset holder requires it.

If so, all the assets falling into the estate (or under the will being probated if multiple will planning has been done – see our Advisory discussing probate fee minimization) are subject to probate, not just the ones where the asset holder requires it.

A typical application for a certificate of appointment requires the drafting and execution of numerous court forms and other accompanying documents. The application form, which is sworn or affirmed before a notary or commissioner for taking oaths for completion, requires that the value of the estate assets as at date of death be disclosed. If the date-of-death value is not known, the executor must swear or affirm an affidavit providing the estimated estate value and an undertaking to advise the court of the actual estate value within six months of the affidavit date.

Additional documents may be needed if, for example, the estate trustee is not named in the will or lives in a non-Commonwealth jurisdiction. Once the certificate of appointment is issued by the court, the executor must file an “Estate Information Return” (not to be confused with income tax returns) with the Ontario Ministry of Finance setting out all the required details and individual values of all of the estate assets.

Numerous requirements for applications for certificates of appointment not explicitly set out in the Rules of Civil Procedure (Ontario) can create traps for the inexperienced, especially as Ontario’s estate laws are set out in a number of different statutes. Very recently, the province brought in new electronic court filing rules, which for these applications are different from general civil court applications. These new rules are very welcome by most practitioners, but do include very specific guidelines which must be followed to avoid rejection of an application.

A lawyer experienced in estate administration will greatly assist the estate trustee to ensure probate documents are correctly drafted and executed, all necessary documents are completed, and communications with the court are completed efficiently, adding significant value by avoiding many time-wasting and frustrating delays.

Susannah Roth is a partner at O’Sullivan Estate Lawyers, based in Toronto. Her practice focuses on estate administration, including cross-border and multijurisdictional administration, advising attorneys and guardians of property, executors, administrators and beneficiaries, real estate transfers and rectification, estate planning (including wills, powers of attorney, insurance and testamentary trusts), and estate litigation. This article originally appeared in the O’Sullivan Estate Lawyers blog.

Notes and Disclaimer

The foregoing is for general information purposes only and is the opinion of the writer. It is not intended to provide specific personalized advice on any individual situation, including, without limitation, investment, financial, legal, accounting or tax advice. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your particular circumstances.