Having sifted through the various small estate procedures in use or proposed in other jurisdictions, and taking into account various issues specific to the Ontario context, the Law Commission of Ontario (LCO) suggests some possible options for small estates reform in Ontario. These are preliminary options intended to form a basis for consultations. The LCO welcomes suggestions from stakeholders and will carefully consider the input received during the consultation process in developing recommendations for the final report.
A. Status Quo
The first option is the status quo. This would mean that all Ontario estates would continue to be subject to the existing probate process. Perhaps the problem of administering small estates is not significant enough to merit relaxing the important procedural protections associated with probate. Some stakeholders have suggested that the probate process is not broken and need not be fixed. In order to assess this, it is important to hear from as many Ontarians as possible about their experience probating small estates under the current probate process.
However, as a result of its preliminary research and investigations, the LCO has tentatively concluded that some form of small estate procedure would be beneficial in Ontario.
B. Court-Assisted or Facilitated Probate
This option is to retain the current probate process for estates of all values but to develop improved public information or programs or both to assist individuals applying for probate for small estates where they do not have a lawyer. This option emphasizes the importance of court scrutiny in protecting estates, beneficiaries and asset-holders from improper administration and ensuring that the transfer of wealth after death is orderly and carried out in accordance with testator intentions or succession law. In particular, this model would ensure that beneficiaries continue to be given notice of a probate application. However, the model also likely means that, in the absence of a dedicated small estate procedure, some small estate representatives will continue to bypass the probate procedure and administer the estate informally where they are able to convince asset-holders to release estate assets without probate.
One approach to facilitating use of the current probate process for small estates is B.C.’s decision in their new Wills, Estates & Succession Act (WESA) to simplify probate application forms generally rather than adopting a separate small estate process. Another approach is an assisted-grant procedure similar to that in Saskatchewan or Victoria, Australia. Here, the legislation contemplates court staff taking an active role in helping applicants to complete the probate application essentially as a legal aid service. In Ontario, such a program would require a significant infusion of financial and other support from the Ontario government. It is worth noting that, in recommending a court-assisted small estate process for Victoria, the Victorian Law Reform Commission (VLRC) was suggesting that an existing program continue with an increased threshold, rather than recommending the creation of an entirely new program (as would be necessary in Ontario).
Improved public information about the probate system would be a particularly important element of this option. For example, VLRC recommended that the court create a “probate pack” providing clear, comprehensive, readily available public information in community languages so that estate representatives may obtain a grant without legal assistance. Of course, such public information is only successful to the extent that it is actually accessible by applicants. This is discussed further below.
C. Simplified Probate Process
This option would involve a small estate process that is court-sanctioned but with reduced procedural and evidentiary steps.
Examples of this model might include the specialized court procedures available to small estates in Saskatchewan and Manitoba. However, these procedures require applicants to bring a court application and it is not clear what other procedural or evidentiary requirements are involved. Neither jurisdiction seems to require that beneficiaries receive notice of an application.
This model is also similar to the summary administration procedures adopted in some American states. In considering this model, a key question is whether it is possible to relax or eliminate any of the evidentiary or procedural requirements currently necessary to obtain probate without creating uncertainty about the legitimacy of the application and making it inappropriate for a court to approve it.
D. Administration by Statutory Declaration
This option would involve a small estate process that requires registration with the court (or a government website) but no court scrutiny and no grant. In the absence of a formal grant, a statutory release of liability would protect asset-holders who rely on the statutory declaration.
There are numerous variations of this model in operation in the United States and versions of it have been proposed by British Columbia Law Institute (BCLI) and South Australian Law Reform Institute (SALRI) in their reports on small estate administration. The key element of this model is that it attempts to establish a middle ground between no court supervision at all and a formal grant of probate. The statutory declaration or affidavit is generally a streamlined document that varies in the amount of information required and notice requirements but is simpler than a traditional probate application. The declaration is registered with the court or a government agency. Registration does not purport to verify the contents of the declaration as probate would, but it creates a public record of the estate and the name of the estate representative and it signals to the representative the legal responsibilities required of the position. Registration also establishes a date for calculating time limits for claims against the estate and other claims.
In order for this option to work, it would probably be necessary to relax some of the procedural and evidentiary requirements that are currently necessary to obtain probate. One of the reasons that the government chose not to implement BCLI’s proposal for administration by statutory declaration was that the proposed declaration form would have required much of the same information that a usual probate application requires (including a list and valuation of the estate assets, a list of debts and a statement that the applicant has made reasonable efforts to locate creditors of the estate, a list of beneficiaries and their entitlement, and an obligation to send a copy of the declaration to each of the beneficiaries). The government noted that “[t]he benefit of the small estate procedure was that it would be simpler and faster. The new probate rules have prescribed forms very similar to the small estate declaration proposed by the British Columbia Law Institute”.
In contrast, SALRI’s suggested version of a declaration under this model would not contain any details of the will, if there is one, other than the name of the deceased and the executor. Nor would it identify beneficiaries or creditors of the estate. In spite of this, SALRI suggested that the administration by declaration model had benefits for everyone involved, particularly where the declaration was put into a public, searchable registry rather than being filed in court. Beneficiaries, creditors and third parties would have free online means of locating an estate and its administrator, it would free up court resources, and it would be appreciably easier for estate representatives to complete the paperwork and get on with administering the estate.
Although this option seems attractive, the counterbalancing factor to be taken into account is the potential for increased risk of fraud or improper administration without the procedural safeguards traditional to the probate process.
E. Public Trustee’s Election to Administer
Versions of this option are common in other jurisdictions in Canada, England and Australia. The public trustee is given discretion in certain circumstances to administer small estates with varying degrees of court involvement but, generally, something less than a full formal grant. In some jurisdictions such as Alberta, Saskatchewan and Victoria, no grant is necessary (sometimes called a “deemed grant”). In Alberta, New Brunswick, Northwest Territories and most jurisdictions in Australia, the public trustee may elect to administer a small estate on filing a written election or affidavit with the court. Notice to beneficiaries may or may not be required under this model.
This option would only ensure the administration of small estates that the Public Guardian and Trustee chooses to accept. BCLI noted in its Small Estates Report that this traditional model for administering small estates was not in keeping with the more modern role of the public trustee in British Columbia. The LCO tentatively suggests that the same conclusion should be drawn in Ontario but invites comments on this point.
F. Informal Administration
This final option reflects the reality that many small estates are administered without any court involvement at all. To a large extent this model is truly informal in that there is no public regulation but, instead, private dealings between estate representatives and asset-holders. However, in some jurisdictions this practice is facilitated by statutory provisions offering limited liability to asset-holders who decide to release assets without probate.
In some cases, such as in England, statutory protection for releasing assets without probate is offered only in respect of certain assets. In contrast, the National Committee for Uniform Succession Laws (National Committee) and the VLRC recommended in their reports a general provision protecting anyone releasing small amounts in respect of an estate. It seems that there has also been some call in England for standardizing the procedures of various financial and other asset-holding institutions for releasing assets without probate.
The issue here is whether Ontario should focus on law reform directed at court procedures making probate more accessible to small estates or whether it should also consider how to facilitate the administration of those small estates that never enter the court process at all.
In considering the six options above, the LCO suggests that a preliminary issue is whether or not Ontario’s existing court supervision model can be made cost-effective for small estates. This involves looking at possible options for assisting applicants in using the existing probate process without the need for legal assistance, such as some form of court service to assist applicants, or enhanced public information or procedures for guiding individuals through the probate process such as developing online applications, or some combination of these methods of assistance.
If it is determined that court supervision is just not economically feasible for a significant number of small estates in Ontario (therefore rejecting models A and B above), there are three ways of proceeding. First is to adopt some other more relaxed process that attempts to stand-in for court protection (models C or D above). Second is the possibility of charging the PGT with the responsibility for administering at least some small estates (model E above). Third is simply to accept and facilitate informal administration by