Probate

(This is an edited version of our Client Guide which provides general information and is made available to our clients to assist them to understand the process of obtaining a certificate of appointment of an estate trustee (formerly called letters probate). This is not intended to constitute legal advice, which by its nature is situation specific. If you have questions about a specific estate problem, you should consult a lawyer who will provide legal advice only after reviewing all the facts relevant to your situation before providing that advice, rather than relying on the general information provided in this Guide.

 

What is a certificate of appointment of an estate trustee?

After death, someone has to step forward and administer the affairs of a deceased person. If the person who does so is named in a will, he or she is called an executor (or executrix). Under the old practice prior to 1995, if a person died without a will, then the court had to appoint an administrator to administer the affairs and distribute the property of the deceased person. Now, in situations where there is a will and also in situations where there is no will, the person who administers the affairs of a deceased person, when appointed by the court, is called an estate trustee.

The court actually issues a certificate in a prescribed form that appoints the person as the estate trustee with a will (in the case of a person who died with a will and named an executor or executrix in the will) or an estate trustee without a will (in the case of someone who died without a will).

The purpose of a certificate is to give comfort or assurance to those who have to deal with the estate trustee, such as banks, insurers and creditors, that the estate trustee has been authorized by the court to be the designated representative to have control over the affairs and property of the deceased person.

The process of validating the appointment of the executor named in a will was formerly called obtaining probate, since the certificate issued by the court was called Letters Probate. The terms, "Probate" and "Letters Probate" are still colloquially used to describe the process of obtaining a certificate of appointment of an estate trustee.

 

Why is a certificate of appointment necessary?

It's not always necessary. In fact, a significant portion of the estate planning done by the deceased person prior to death is for the purpose of trying to avoid having to have an estate trustee appointed for some or all of his or her assets. Where strangers have to pay significant amounts of money to the estate or obtain something from the estate, the certificate of appointment of the estate trustee acts as evidence of the authority of the estate trustee to receive money, pay money or otherwise deal with estate assets on behalf of the estate. Administrative practices of banks and insurers, as well as statutory provisions, often require that a certificate of appointment be obtained.

 

What avoid obtaining a certificate of appointment?

In a word, taxes.

The Ontario government assesses a tax of 1.5% on the value of estates over $50,000, with a flat tax of $250 on the first $50,000 of estate value. While these were formerly called probate fees, they are now called Estate Administration Tax. On even a modest home, which is often the largest asset in an estate, the tax can mount quickly. If it is not necessary to obtain a certificate to administer and distribute the property of the deceased, then there can be significant cost savings.

 

The process

The person or persons who wish to apply to become estate trustees must prepare a prescribed application, verified by affidavit, providing information about the deceased person and estate assets. If there was a will, an original and affidavit of execution of the will is attached.

The applicants then must then serve a prescribed notice of the application on all beneficiaries named in the will; or, where there is no will, on those entitled at law to be a beneficiary. If there is a will, each beneficiary is entitled to a copy of the will, or, if there is a specific gift to a beneficiary, an extract from the will concerning the gift.

The application, notice of application with proof of service, payment of the estate administration tax, and the original will (and a copy), if any, must be filed with the Superior Court of Justice (in Toronto, there is a special office of the court called the Estates Court). In times past, there was a special court called the Surrogate Court to deal with estate matters. In cases where there is no will, a bond must also be furnished unless a court order eliminates this requirement.

 

Privacy

A copy of the will is retained by the court and is available for inspection by a member of the public. For those of us who value privacy, we fortunately do not have the English practice, where notices of large estates are published daily in The Times newspaper, usually with the estate value and often with details of specific gifts to individuals and charities.