The preceding chapters of this Final Report have described a number of problems that may arise in probating small estates under the current probate system in Ontario. These complications are not specific to any particular component of the probate process. That is, none of the current legal requirements is inherently inappropriate for small estates. On the contrary, with one or two exceptions, it seems that the current application requirements for probate continue to be important to protect Ontario estates from fraud or improper administration. Instead, the problem for small estates is one of economic feasibility. Regardless of the value of obtaining probate, at some point the cost of doing so may exceed the benefits, or at least make it not worthwhile. At that point, estate representatives may decide that the probate system is effectively inaccessible. They may decide to administer small estates without probate or may abandon the assets and fail to administer the estate at all.
This problem accessing the probate system is, in some circumstances, a systemic one. Some asset-holding institutions such as pension plans interpret their governing legislation as requiring them to insist on probate as proof of authority before releasing assets. For these institutions, the probate requirement is more than a matter of risk management. It is a statutory duty that strictly precludes them from waiving probate, at least where there is no will. As a result, these institutions may be left holding many small accounts that have been abandoned due to the disproportionate cost of obtaining probate.
Although Ontario does not currently have a small estates process, small estates procedures are in operation in two Canadian jurisdictions, Saskatchewan and Manitoba, and throughout the United States and Australia. In these jurisdictions, the problem of probating small estates has been significant enough that a legislative solution has been deemed necessary.
Not every jurisdiction has determined that a small estates procedure should be adopted. In 1999, the Law Reform Commission of Nova Scotia prepared a report on probate recommending against a small estates procedure for fear that it would overly complicate the probate system. More recently, a 2013 Alberta Law Reform Institution (ALRI) report on estate administration chose not to address the problem of small estates directly. ALRI did acknowledge that some estates are administered informally but it concluded that this practice was not a matter for legislative reform:
If banks want to pay out assets informally on the basis of some indemnity or undertaking, this is a matter of policy for financial institutions.
As discussed above, British Columbia chose not to bring into force the small estates procedure recommended by British Columbia Law Institute (BCLI) in its 2005 Interim Report and written into the Wills, Estates and Succession Act (WESA). The government chose instead a procedure designed to facilitate the administration of simple estates.
The LCO has considered the example of these jurisdictions and observes that the context is quite different here. Nova Scotia and British Columbia were both engaged in law reform projects on probate generally. A more particular concern for small estates was perhaps subsumed within the broader goal of simplifying the system overall. For example, the British Columbia government ultimately concluded that a small estate procedure was not needed since the new probate rules were already very similar to those proposed for small estates. And Alberta’s project focused on the duties of estate representatives after appointment rather than the appointment process. ALRI’s comment, above, was only indirectly related to the issue of small estates under the probate system. Furthermore, it is the LCO’s view that while financial institutions are free to apply their own policies for paying out assets, the matter is not entirely separate from a public concern about an accessible probate process.
In any event, the LCO has concluded as a result of its consultations with the identified stakeholder groups that Ontario would benefit from a streamlined small estates procedure. This is to encourage the estate representatives of small estates to access the benefits of probate and, ultimately, ensure that these estates are administered according to the intentions of the testator or the principles of succession law. At the same time, this procedure must be designed so as to preserve a proportionate degree of legal protection for the beneficiaries, creditors and the estate representative.
In considering what estates should be eligible for a small estates procedure, we have focused on those estates for which the cost of probate is likely to impede access to the process. Access may be impeded either because the cost exceeds the value of the estate or because the cost is sufficiently disproportionate to the value of the estate that probate is not worthwhile. As discussed in chapter III above, this point is indeterminable. It will vary depending on both the value of the estate and the cost of probate. However, the LCO has concluded that, consistent with other jurisdictions with a separate process for small estates, in order to make a small estates procedure practically effective, eligibility for the procedure should be defined by a bright line monetary value limit. More specifically, we have concluded that a small estate procedure should be available to estates with a gross value up to $50,000.
The remainder of this chapter delineates the elements of a low cost, small estates procedure that the LCO believes would give estates worth up to $50,000 an alternative to incurring the cost of the full probate system. This small estates procedure would exist alongside the regular or standard probate stream. It would involve a one or two page application form by which the applicant would attest to his or her entitlement to administer the estate. There would be few evidentiary requirements, although the requirement to serve the application on those interested in the distribution of the estate would be retained. A successful application would result in the issuance of a Small Estates Certificate with the same legal effect as a Certificate of Appointment (COA) in the regular probate stream except that authority would be limited to the specific assets listed in the application. The estate would remain liable to pay the estate administration tax, but would be exempted from filing the Estate Information Return. The procedure would be designed to be accessible to estate representatives without legal assistance. Ideally, applicants would be able to file applications online.
During consultations, many stakeholders from all stakeholder groups expressed concern for those estates with a value just beyond the value cut off (for example, $52,000). Why should they lose out on the benefits of a small estates procedure? This is a concern that applies to all “bright line” cut-offs. However, some of the LCO’s recommendations below (such as recommendations for a plain-language guide to probate and simplified forms) have the potential to benefit estates of any value, including those only slightly above eligibility for the small estates process.
A. Possible Models for a Small Estates Procedure
A pivotal issue in developing a small estates process is the degree to which it should be supervised by the court alongside the regular stream probate process. Currently, there is a wide range of small estates procedures operating in different jurisdictions. They were created to respond to local probate traditions and have evolved quite differently in different legal contexts.
Some procedures are administered by the court and result in a legal grant of probate similar to the usual probate process. These tend to offer a relatively significant degree of legal protection but may be more procedurally involved and, thus, somewhat more costly for the applicant. At the other end of the spectrum is informal administration. This may be no more than a statutory provision protecting asset-holding institutions from liability where they release assets to estate representatives without probate. There is no court involvement here at all and little or no legal protection for those interested in the estate. But neither are there costly procedural requirements. So long as the estate representative is legally authorized in fact and is acting properly, the full value of the estate is available for distribution to the creditors and beneficiaries.
Between these two ends of the spectrum are a myriad of other models that attempt to balance some degree of court supervision with simplified procedures designed to keep costs down. In this section, we describe some of the advantages and disadvantages of key models in operation in other jurisdictions. Next, we explain why the LCO has concluded that a court supervised small estates process would be the most appropriate model for Ontario.
2. Alternatives to a Court-Based Small Estates Procedure
a) Informal Administration
As noted above, the informal administration model lies at one end of the spectrum and involves no court supervision at all. Instead, financial and other institutions are simply given statutory protection from liability where they release assets worth less than a certain value without proof of probate. If it turns out that the assets are given to the wrong person, the institution is protected and the loss is borne by the estate.
This approach facilitates the release of specific estate assets held by specific institutions. However, institutions are not required to release the estate assets they hold and it is still possible that a probate application may be necessary to obtain possession of certain assets.
There would be some benefits to a small estates procedure based on informal administration. The comfort of statutory protection would encourage most financial institutions to waive the probate requirement for small asset transfers. The result would be the industry-wide adoption of the particular value limit established by legislation. This would address the commercial uncertainty caused by institutions having different value limits for waiving probate. It would also be commercially friendly solution since it would facilitate the release of small value assets directly to those entitled to them.
Practical benefits aside, the key drawback of the informal administration model is that it would continue, and indeed promote, the current practice where larger estates benefit from probate protections and small estates are more likely to be administered outside the probate system. This model would not retain any of the protective benefits of probate. It would not authorize the applicant to act on behalf of the estate generally. It would not involve any assessment of the validity or terms of a will. Most importantly, it would provide little or no protection against fraud.
b) Affidavit Procedures
A model that may or may not involve some degree of court supervision is the affidavit procedures common in U.S. jurisdictions. This model is provided for in the Uniform Probate Code (UPC) and has been widely adopted into state legislation. Under this model, persons entitled to estate assets may prepare an affidavit which is given directly to financial or other institutions to authorize the release of particular assets held by that institution. Some jurisdictions, but not all, require that the affidavit be filed with the court. Affidavit procedures are available only where the total value of the estate is under a legislated value limit. The maximum value set out by the UPC is $25,000, but states tend to set higher amounts. The procedure typically applies both where there is a will and in intestacies, although in some jurisdictions it applies only to intestacies. Legislation provides that financial or other institutions are statutorily protected from liability where they release assets on the basis of an affidavit. No estate representative is appointed under this model.
For example, New York has a small estates affidavit procedure (SEAP) applicable to estates consisting only of personal property and having a value not exceeding US$30,000. These affidavits are filed with the court and it appears that the process works reasonably well.
Affidavit procedures are designed as a middle ground between the protection of a court supervised small estates process and the accessibility and convenience of informal administration. However, different procedures range dramatically in the degree of legal protection they afford. Affidavit procedures filed with the court may not differ significantly from court-supervised procedures discussed below.
c) Administration by Public Trustee
In some jurisdictions, including several Canadian provinces, small estates may be administered by the public trustee or some other professional administrator. Typically, the public trustee or other administrator may elect whether or not to become involved in any particular case.
There is no similar provision in Ontario law giving the Ontario Public Guardian and Trustee (OPGT) particular authority to administer small estates and the OPGT has not traditionally played this kind of protective role for small estates. During consultations we heard that the OPGT does not have the resources to expand its role in regard to small estates and that this situation is not likely to change in the near future. In any event, the LCO does not believe that expanding the OPGT’s role in this direction is advisable. There is nothing about the small monetary value of an estate that, in and of itself, suggests that an estate representative should be replaced by a public official. Respect for the testator’s intentions requires that a named executor represent the estate where possible. We have concluded that the protective power of the OPGT is best concentrated on those estates where there truly is no one else to carry out the administration.
3. Court-Supervised Small Estates Procedures
a) The Manitoba and Saskatchewan Models
The two Canadian provinces that currently have small estates procedures in place, Manitoba and Saskatchewan, have chosen court-based procedures.
In Saskatchewan, an ex parte application may be made to the court to distribute an estate without a grant where the estate is made up of personal property not exceeding $25,000 in value.  The estate representative’s scope of authority is limited to the terms of the resulting court order, which covers particular assets. Although the Rules expressly provide that the application may be brought without notice to the beneficiaries, in practice, the court requires that notice of the application be served to heirs where there is no will. After distributing the assets, the applicant undertakes to file the receipts with the registrar.
According to a Saskatchewan court official, this small estates procedure is used perhaps two or three times per month, usually by unrepresented applicants and more often in the case of intestacy. The court official felt that this procedure offered negligible benefits over the usual probate process. It is not all that much easier than the usual application and it can be limiting since it does not result in a grant which would provide the estate representative with authority to open an estate bank account or receive subsequently discovered estate assets.
Manitoba has a similar small estates procedure for estates worth less than $10,000 whether or not there is a will and whether or not the estate includes real property. There is no provision for notice to beneficiaries or creditors. The resulting order is limited to the listed assets, and does not result in a grant of probate. According to a Manitoba court staff member, this process is used reasonably often, perhaps 10 times per month, mostly by unrepresented people who are dealing with small assets including bank accounts, mineral rights or vehicles.
Most recently, the Northwest Territories has drafted legislation providing for a similar small estates procedure in that jurisdiction. It is based on the Saskatchewan model and, if enacted, it would apply to estates with a net value of less than $35,000. Again, it would not result in a grant; however, the standard form court order would provide that it has the same effect as a grant.
Of the various models examined by the LCO, these are most similar to the small estates procedure we recommend below. However, these procedures do not result in a formal grant and, therefore, are not necessarily a full alternative to the regular probate stream. Also, the Manitoba and Saskatchewan procedures are, in some respects, relatively informal. For example, the Saskatchewan form does not require notice and does not require the applicant to make any declarations as to the validity of the will, if any, or their entitlement to administer the estate. In fact, the Saskatchewan form does not mention the possibility of a will at all. The Manitoba form does require that any will be attached to the application. However, unlike the Saskatchewan form, it does not require the applicant to list the assets of the estate (with the exception of real property).
In other respects, the Saskatchewan procedure is relatively formal. The Saskatchewan form requires that the applicant list precisely how the estate is to be distributed and then to file the receipts with the court. (The Northwest Territories form would also require this.)
b) Court Supervision Remains Important for Small Estates in Ontario
There was a significant degree of general support among all stakeholder groups for the current court sanctioned probate system. Although stakeholders had many suggestions for improving the system, most felt that it was functional and should continue to be available to Ontario estates regardless of value. As one practitioner put it, even though the current system may effectively be a rubber stamp, it continues to operate as a deterrent to fraud through our “residual cultural memory”. In other words, in spite of the actual effectiveness of the probate system, society continues to believe in its effectiveness and this belief, in and of itself, serves as a deterrent to fraud.
During consultations, a number of suggestions were made for reducing the cost of probate by outsourcing all or part of the system to alternative forums. For example, one practitioner speculated that responsibility for the system might be transferred to an administrative tribunal. A few stakeholders, including legal technology specialist Dan McAran, proposed that probate for small estates be regulated through an online registry in conjunction with specially authorized lawyers. The Surety Association of Canada contributed a written submission proposing that probate for small estates be replaced by a mandatory private insurance scheme.
As a result of the consultations and its research, the LCO has concluded that court supervision is of continued importance to an effective probate system generally. The LCO considers that a court supervised small estates process is the model most in keeping with the protective philosophy behind Ontario’s probate system. It is also most in keeping with the rationale behind this project to increase accessibility to probate for small estates. The recommendations in this Report demonstrate that there is more that can be done within a court-based probate system to ensure that it is accessible to all Ontario estates regardless of value.
Some might argue that a court supervised small estates process will undermine the credibility of the existing probate system and call into question why larger estates should be required to meet additional application requirements to achieve the same stamp of authority. The answer here is that the balance between achieving accessibility while maintaining legal protection in a legal process is never clear. There will always be a question whether accessibility is being over-emphasized at the expense of legal protection and vice versa. A court supervised small estates process is itself an attempt to strike this balance. It offers more protection to small estates than they receive when they are informally administered. But it emphasizes accessibility over the procedural protections of the usual probate process. It also reflects the principle of proportionality in that additional procedural protections are deemed appropriate to address more valuable estates.
We have also concluded that, unlike the small estates procedures in Manitoba and Saskatchewan, it is important that a court supervised small estates procedure result in the issuance of a Small Estates Certificate with the same legal effect as a COA issued under the usual probate process. The Small Estates Certificate will also send the signal that the small estates procedure has the same legitimacy as the usual probate process so that third parties may rely on it when releasing assets. The small estates process also has the benefit of not requiring amendments to various incidental legislation and regulations that rely on the issuance and legal effect of a COA.
However, under the usual probate process, a COA has the legal effect of authorizing the estate trustee in respect of the estate as a whole, including any subsequently discovered assets. This would not be an appropriate feature for a small estates process based on a monetary value limit. It would give rise to the concern that a dishonest estate representative might declare the value of the estate to fall within the value limit, make use of the small estate procedure and then later purport to have discovered additional estate assets bringing the total estate value above the value limit. In order to remove the temptation for applicants to underrepresent the size of the estate, a small estate certificate under a small estates procedure should authorize the estate representative only in relation to the estate assets listed in the application (with one opportunity to amend the identified value of the assets). This will require incidental amendments to the Estates Act, such as ss. 32(2), for example, which deals with the evaluation of subsequently discovered property.
This concern for the possibility of a dishonest estate representative is also reason to favour continued court supervision over informal administration. In a court supervised process, the applicant is required to include the estate value in the application. This number is typically given some degree of scrutiny by court staff. Also, the act of filing an application with the court itself adds a degree of formality that might dissuade some applicants from acting dishonestly.
A court-supervised small estates process that is streamlined in the way we describe below should address the problem of finding someone willing to act as estate representative for very small estates. It should also encourage testators planning their estates to do their gift giving within the protection of probate. It should extend the protection of probate to many more small estates that are currently being administered informally. Furthermore, it should address the systemic problem of small accounts being abandoned by making it economically feasible to distribute these into the hands of those beneficially entitled to them.
The Law Commission of Ontario makes the following recommendation:
1. a) The Estates Subcommittee of the Civil Rules Committee prepare and the Ontario government enact amendments to Rule 74 of the Rules of Civil Procedure and the Estates Act to provide for a simplified small estates procedure as an alternative to the existing probate system for Ontario estates valued at up to a monetary amount specified by regulation.
b) This procedure result in a court-issued Small Estates Certificate with equivalent legal effect to a Certificate of Appointment of Estate Trustee, except that authority is limited to the estate assets specifically listed in the application.
B. Value Limit of $50,000 for Estates with and without Wills
As discussed in chapter III.C.3 above, the LCO has concluded that a small estates process be available to estates having a total value on the date of the deceased’s death of up to $50,000. In order to prevent artificially structured “small” estates from accessing the process, value would be measured as a gross amount consistent with section 32(1) of the Estates Act. Unlike the definition of value in the Estate Administration Tax Act, the value of encumbrances on real property contained in the estate would not be deducted from total value. Value would be calculated in relation to all of the deceased’s assets whether or not located in Ontario and whether or not discovered as of the date of the application.
There was discussion during consultations as to whether a small estates process should be directed primarily at estates with wills, estates without wills, or both. One suggestion was to impose a relatively low eligibility threshold for estates without wills and a higher eligibility threshold for estates with wills as a means of encouraging more testators to make a will. The LCO has considered this proposal in relation to the rationale of this project to improve accessibility to probate. Although it is usually easier to administer a small estate without probate where there is a will, small estates may have difficulty accessing the probate system whether or not there is a will. Furthermore, a dual eligibility threshold would complicate a process that must remain simple if it is to be effective. Therefore, the LCO recommends that a single eligibility threshold be set for small estates both with and without wills.
The Law Commission of Ontario makes the following recommendation:
2. a) The small estates procedure be available in respect of estates with a total value not exceeding $50,000.
b) Total value be calculated consistent with section 32(1) of the Estates Act as all of the property that belonged to the deceased at the date of his or her death, including property discovered subsequent to a Small Estates Certificate being issued, and without regard to any encumbrance on real property that is included in the property of the deceased person.
c) The $50,000 value be designated by regulation to be amended as appropriate.
C. Application Form and Requirements
The LCO has concluded that instituting two streams of probate, regular or standard and small estates, would best respond to the need to take into account both accessibility and the legal protections of probate for all estates. The streams differ in the weight given to the two factors. Notably, among other differences, the Small Estates Certificate, while equivalent to a COA issued under the regular stream, would provide limited legal authority to deal with only those assets listed in the application. To address assets discovered after the issuance of the Small Estates Certificate, applicants would be permitted one amendment, so long as the revised value of the estate does not exceed $50,000.
The small estates stream of probate should be significantly simplified relative to the existing probate process so that estate representatives of small estates have a real alternative to the current process. We have examined a number of application forms used in other jurisdictions and have been struck by the wide variety in use. No two forms are alike. This is further evidence that there is no easy compromise to be made between the accessibility of probate and the legal protection it affords.
Both Saskatchewan and Manitoba have adopted abbreviated forms with relatively few requirements. Saskatchewan’s form requires a list of the deceased’s assets and their allocation to creditors and beneficiaries, each of whom must also be listed.  No notice is required although, as a matter of practice, court staff require notice where there is no will. The form also requires a list of the persons holding the deceased’s assets. The form does not require information about the validity of the will, if there is one. Nor must the applicant make any statement about his or her legal entitlement to administer the estate. However, the court maintains some supervision over the administration of the assets since the applicant undertakes to file all receipts with the registrar.
Manitoba’s application form requires the applicant to state his or her relationship to the deceased, but there is no declaration of legal entitlement to administer the estate. The form also requires the applicant to attach the will if there is one, although there is no declaration as to the validity of the will. The deceased’s next of kin must be listed along with their ages. There is no requirement for the applicant to file receipts with the court; however, he or she does undertake to provide an account of the administration when required.
Northwest Territories’ proposed small estates program would involve application requirements similar to those in Saskatchewan. There would be no notice requirement, but the applicant would undertake to file all receipts with the registrar.
Of the myriad of different application requirements in small estates programs in other jurisdictions, it is difficult to perceive a pattern or logic behind the array of requirements deemed important and those that have been omitted. Although the LCO favours a court supervised procedure as in Saskatchewan and Manitoba, it has concluded that a more formalized application process is suitable in this jurisdiction where the eligibility limit will be higher ($50,000) and the Small Estates Certificate will have the same legal effect as a COA.
Therefore, the LCO has concluded that the best compromise between accessibility and legal protection in Ontario lies in continuing to observe the traditional requirements for probate but shifting the responsibility for the truth of those requirements from the court to the applicant. For example, the validity of any will and the legal entitlement of the applicant to administer the estate should continue to be eligibility requirements for a Small Estates Certificate. However, instead of being required to file documentary proof that these requirements are met, the applicant would check boxes making declarations to this effect.
The instructions available with the small estates application form and the obligation to swear to or affirm these declarations would impress upon the applicant their significance and his or her legal responsibility in administering the estate. However, completing and filing the application would be much easier. A number of affidavits potentially required under the current process would be replaced by one affidavit.
Besides completing the application, the applicant would need only send the application to the beneficiaries, gather the death certificate and will, if there is one, and have the application commissioned and filed with the court. A 30 day delay period before filing the application would provide an opportunity for beneficiaries to receive the notice and challenge the application if they wish. If online filing were available, as the LCO recommends below, an electronic substitute for swearing or affirming the application could be explored.
The same application form would be used whether or not there was a will and would be designed to be completed by a layperson. It would require the following information:
- the name, last address and spousal status of the deceased and date of death
- the name and Ontario address of the applicant and relationship to the deceased
- a list of estate assets and their value,
- the basis of entitlement to administer the deceased’s estate (by checking the basis from a standardized list), and
- standard form declarations to be checked that to the best of the applicant’s knowledge and belief:
o the deceased had property in Ontario
o the estate is worth not more than $50,000
o no one else has applied to be estate trustee for the estate
o if there is a will, it is the last valid will of the deceased, there are no issues as to the proper execution of the will and there have been no alterations to the will
o if the will is handwritten, that the whole of the document, including the signature, is in the handwriting of the deceased
o if there is no will, a careful search was made and the applicant reasonably believes that the deceased did not leave a will
o if there are others entitled to administer the estate, they have renounced their right
o 30 days have passed since notice of the application was sent to beneficiaries
- a declaration promising to faithfully administer the estate according to law and to provide a full accounting of the administration when required
- the applicant’s signature sworn or affirmed before a commissioner of oaths.
Significantly, the only supporting evidence required for the declarations in the application form would be the following:
- a copy of the death certificate (including one issued by a funeral director)
- a copy of the will where there is one (the original will would not be required), and
- a form declaring that the application was sent to the beneficiaries (including the OPGT, Office of the Children’s Lawyer (OCL) or both where appropriate).
The estate representative would be personally responsible for the validity of the information contained in the application and would be liable for loss to the estate resulting from inaccurate information.
The small estates application would require commissioning or notarization. The LCO heard conflicting views about the extent to which the current requirement for commissioned probate applications is an obstacle for estate representatives of small estates. Although a commissioning service is offered in court offices, this is not well publicized and may be considered somewhat expensive ($13 per form). It would be more reasonable when only one form is required, rather than the larger number in the regular probate stream.
A few jurisdictions in the United States have dispensed with the requirement to commission small estates affidavits. In these jurisdictions, the form contains a statement advising the applicant of the legal consequences of giving false information and the applicant signs the application “upon penalty of perjury”. However, the LCO has decided that, given the relative lack of evidentiary proof required under the streamlined process, it is important for some formality to accompany a small estates application in order to dissuade applicants from taking their responsibilities too lightly.
Just as important as the small estates application form itself would be the explanatory material that would accompany the form. This material would guide the applicant through each box and explain in plain language the legal significance of checking the box and of assuming responsibility for the estate.
The role of the court office would be to assess the application for completeness; however, the court would not be obliged to look behind it. This is similar to the role that BCLI envisioned that the court would play in the B.C. small estates declaration process, although that process was not brought into force. The court office would issue Small Estates Certificates on an expedited basis so that these small estates may be administered quickly and cost-effectively.
Some stakeholders raised a concern about increased risk of fraud in a system with fewer procedural requirements, although others did not consider this to be a significant concern for practical purposes. One practitioner noted that fraudsters are more likely to act outside the court system, by forging a cheque, for example. Another practitioner stated, “I’m less worried about fraud than people walking away”. The LCO has concluded that any potential risk of fraud associated with fewer evidentiary requirements is outweighed by the likely benefit of bringing more small estates within the protection of the probate system.
Legal protection in a small estates procedure would be achieved in two ways: first, with a requirement that the applicant send the application to those interested in the distribution of the estate and, second, by having the applicant declare that particular risk factors are not present. For example, if the applicant is not the executor named in the will, he or she would have the choice to check a box stating that the executor had renounced his or her right to apply for probate (see Recommendation 3(a)(iv)).
Furthermore, it must be remembered that the small estates stream would be designed in part for small estates that might otherwise not be in the probate system. Therefore, they would receive at least more legal protection than they do currently. It would also encompass estates that would be in the system, but perhaps at an undue financial cost and effort.
The Law Commission of Ontario makes the following recommendation:
3. a) The small estates procedure involve a short, streamlined application form requiring the following information:
i. basic information about the estate,
ii. basic information about the applicant,
iii. basis of the applicant’s entitlement to administer the estate,
iv. a list of estate assets and their value, and
v. a standardized declaration affirming the applicant’s acceptance of the responsibility to administer the estate according to law.
b) The form be sworn or affirmed by the applicant before a commissioner of oaths.
c) The form require the following supporting documents:
i. a copy of the death certificate,
ii. a copy of the will, if one exists, and
iii. a form declaring that the notice requirement described in Recommendation 4 has been met.
d) The court office process and issue Small Estate Certificates on an expedited basis.
D. Notice Requirements under a Small Estates Process
Notice is pivotal to the procedural fairness of any court or administrative process. However, even the duty to provide notice has been adjusted in some circumstances in order to facilitate access to justice. For example, certain small claims court jurisdictions have either modified or eliminated the rules for service of documents.
The reduced procedural protections of an Ontario small estates process would place a corresponding responsibility on beneficiaries to protect their own interests. Therefore, it is important that notice to beneficiaries and others interested in an estate continue to be required as part of a small estates process.
Even where there is a duty to give notice to beneficiaries, there is still an issue as to whether there should be an additional requirement for proof of service to be filed with the court. It might be sufficient to dispense with proof of service so long as the applicant is made aware of the responsibility to notify beneficiaries as part of the application process.
Retaining the current requirement in Rule 74 to file proof of service of notice with the court would significantly add to the complexity of the process. It would also call into question just how vigilant the court is expected to be in verifying the information contained in a small estates application. On the other hand, effective notice is the threshold requirement for the protection of beneficial interests in the estate. Of all the procedural protections that might be compromised in order to promote accessibility to probate for small estates, the notice requirement is arguably most integral to the fairness of the process.
On balance, the LCO is of the view that the notice requirement should be retained as part of a small estates process and that there should continue to be some proof of service filed with the court. The simplest procedure would be to forgo a separate notice form and, instead, require the estate representative to serve the completed application form itself. Accompanying the application form would be a cover page with set language explaining to the recipients why they are receiving the application, the standard rights of beneficiaries under an estate and the process to be followed before distribution. The applicant would be required to send this to the last known address of each of the known beneficiaries. Where there are minors or incapable beneficiaries, the notice would be sent to the OCL and the OPGT respectively. This notice requirement would be in addition to the online estates database recommended below.
It is common in many jurisdictions for a delay period to be incorporated as part of a small estates process. A passage of time is required after notice has been sent out and before the application can be filed. This allows time for beneficiaries to receive the notice and challenge the application if they so wish. The LCO believes that this is a simple, low cost means of providing beneficiaries with a real opportunity to protect their interests. We have concluded that a 30 day delay period would be appropriate.
In filing the application form with the court, the estate representative would be required to attach a single form declaration that the service requirements have been met. This form would be appreciably shorter and easier to understand than is the current Affidavit of Service of Notice under Rule 74.
Another form of notice in the current probate process is the requirement for proof of consent of the beneficiaries in intestacy. The LCO believes that this requirement should be eliminated from a small estates process. The LCO heard in consultations that this requirement can delay and complicate the application. Beneficiaries may be out of the country, they may be minors or incapable or otherwise unresponsive. Yet it is arguable that this consent requirement does not significantly improve the legal protection of intestacies over and above the notice requirement. The purpose of notice is to provide beneficiaries with an opportunity to challenge the application if they so wish. In the absence of such a challenge, it is reasonable to infer consent at least for the purpose of a small estates process.
The Law Commission of Ontario makes the following recommendation:
4. The small estates procedure require that the applicant
i. send a copy of the application and an explanatory form to all known persons entitled to share in the distribution of the estate at least 30 days before filing the application with the court,
ii. send the application to the Office of the Public Guardian and Trustee or the Office of the Children’s Lawyer, or both, as applicable, where there are minors or incapable beneficiaries at least 30 days before filing the application with the court, and
iii. file with the court, along with the small estates application, a single page declaration that the notice requirement has been met.
E. Minors and Incapable Persons
With the reduced court scrutiny involved in a small estates process, persons interested in an estate would have a greater responsibility to protect their own interests by challenging the applicant’s appointment if necessary. However, this would not be possible for most minors or incapable persons. The importance of protecting these vulnerable beneficiaries is reflected in the current requirement in Rule 74 to serve notice on the OPGT and OCL whenever minors or beneficiaries are interested in an estate.
Many practitioners and other stakeholders, including the OCL, felt that estates involving minors or incapable beneficiaries should be excluded from a small estates process. This is understandable on the assumption that the alternative is for these beneficiaries to be protected under the current probate process. But, in practice, we have seen that not all beneficiaries of small estates are protected under the current system. Some small estates are not administered at all. Some are administered but informally without legal protection. Some are probated but at disproportionate cost which is incurred by all those with an interest in the estate. Therefore, it is not necessarily the case that minors and incapable beneficiaries would be disadvantaged by a small estates procedure. Reduced procedural protections would be offset to some extent by the increased accessibility and reduced cost of the process.
The best solution to preserve the legal protection of vulnerable beneficiaries is not to exclude them from its potential benefits but, rather, to maintain the notice requirement under Rule 74 that the applicant serve the application on the OPGT and OCL where appropriate.
There remains a risk that applicants filing under a small estates process will simply not report the existence of minor or incapable beneficiaries. However, that is already a risk inherent in the probate system and is not one which should cause small estates to lose out on the benefits of a small estates process.
The Law Commission of Ontario makes the following recommendation:
5. a) The small estates procedure be available to small estates even where there are minor or incapable beneficiaries.
b) Pursuant to Recommendation 4(ii), the applicant be required to send a copy of the application to the Ontario Public Guardian and Trustee or the Office of the Children’s Lawyer, or both, as applicable, at least 30 days before filing the application with the court.
F. No Bond Requirement
1. Earlier Law Reform Debate on Bond Requirement for Estates (Regardless of Value)
During consultations, stakeholders did not identify substantive probate requirements they considered unnecessary to the protection of the estate and those interested in it. This is with the exception of the mandatory bond requirement.
The current bond requirement for estate representatives not named in a will applies regardless of the value of the estate. This requirement has been the subject of ongoing reform efforts beginning with the Ontario Law Reform Commission (OLRC) in its 1991 Report on Administration of Estates of Deceased Persons. The OLRC recommended dispensing with this bonding requirement for intestacies and wills not naming the applicant but retaining the bonding requirement for non-residents. The court would continue to have discretion to order a bond in other circumstances.
In 2010 and 2012, the Ontario Bar Association (OBA) suggested reforms to the Ministry of the Attorney General (MAG) along the lines recommended by the OLRC. The OBA reasoned as follows:
Given that all those who are appointed to act as trustee in these circumstances must reside in Ontario and given the clear remedies for breach of fiduciary duty, there is little or no policy justification for requiring the additional expense and regulatory burden of requiring either a bond or a motion to dispense with a bond. This is an unnecessary cost to beneficiaries and the justice system.
However, the OBA suggested that a bond still be required where there are minor or incapable beneficiaries.
The OLRC and OBA both noted that other jurisdictions, such as England, have made similar reforms to their bond requirements. British Columbia can now be added to that list. In its new Wills, Estates and Succession Act (WESA), which came into force on March 31, 2014, British Columbia eliminated the mandatory requirement that applicants for administration provide security except where a minor or a mentally incapable adult is interested in the estate. The government noted that, among other things, the security requirement “adds complexity and delay, increasing the overall cost of an administration”.
In contrast, the Surety Association of Canada (SAC) has emphasized the protective role of surety bonds. In its 2012 submission to MAG, SAC proposed a number of specific recommendations that would improve the ability of bonds to play this role.
2. Stakeholder Perspectives on Bond Requirement for Small Estates
During the LCO’s consultations it became apparent that there is a strong degree of consensus among the estates bar that the general bond requirement is more burdensome than it is protective and should be dispensed with subject to specific limitations. This is particularly so in relation to small estates.
SAC also filed a written submission in this project, discussing the role of administration bonds specifically in the context of small estates. Far from conceding that the bond requirement is burdensome for small estates, SAC proposed a small estates process that would make use of the protective effect of administration bonds as an alternative to the current court-based process. Under this proposal, applicants to administer estates worth less than $100,000 would register with the court and provide an administration bond in the amount of the value of the estate. This would secure the interests of beneficiaries and creditors as well as payment of the estate administration tax. The court would maintain a registry of estate trustees but would not scrutinize applications. Very small estates worth less than $10,000 would be exempted from the requirement to provide security.
The SAC’s proposed process would provide some protection to beneficiaries and creditors of small estates while reducing costs. However, it would entirely eliminate court scrutiny of proposed estate trustees. Anyone with the funds sufficient to post a bond would presumably be entitled to register. Any will, no matter how suspect, could be put forward. It is not clear from the SAC’s proposal how conflicting applications would be addressed. Once registered, beneficiaries and creditors would be required to protect their own interests by making a claim against the secured amount.
In the LCO’s view, this proposal would essentially privatize the probate process for small estates. It would react to fraud rather than preventing it. Although the security would offer some deterrent against wrongdoing, the estate representative would only be deterred where he or she expects beneficiaries and creditors to be vigilant enough to protect themselves.
For these reasons, and particularly the additional complexity and cost that would be involved, the LCO has concluded that no bond should be required as part of Ontario’s small estates procedure. Instead, the primary protective element for the Ontario small estates procedure should be the notice requirement described above.
3. Non-Resident Applicants in a Small Estate Procedure
The LCO’s conclusion that a bond should not be required in a small estates procedure has particular implications for non-residents applying to administer small estates. Under the regular probate stream, non-resident executors (named in a will) may apply for a COA where they are either resident in the Commonwealth or they post a bond. However, non-residents wishing to administer intestacies are not entitled to apply at all. Instead, where there are no other next-of-kin residing in Ontario, the OPGT may apply to administer these intestacies.
Eliminating the bond requirement in a small estates process would not have any impact on the current prohibition against non-residents administering intestacies. However, it would mean that executors residing outside Ontario would not be able to take advantage of the small estates process. They would be required to apply under the regular probate stream. This is a necessary restriction. A bond requirement, even for a narrow category of applicants, would likely introduce a degree of complexity and cost sufficient to undermine its purpose.
The Law Commission of Ontario makes the following recommendation:
6. Security not be required as part of an application for a Small Estates Certificate.
G. Legal Effect and Consequences of a Small Estates Process
1. Legal Effect of a Small Estates Process
A small estates application would be approved by the court and would result in the issuance of a Small Estates Certificate with the same legal effect as a COA. Third parties would be able to bring a proceeding to challenge Small Estates Certificates just as they may with COAs.
The legal equivalency of COAs and Small Estates Certificates would be important to ensure that other legal processes relying on the issuance of a COA would not be disrupted. For example, there should be no effect on the Bank Act confidentiality provisions or the Income Tax Act rules for establishing legal authority. Nor should there be concern for possible constitutional implications of reform.
This model of small estates process would also alleviate any jurisdictional concerns. For example, other jurisdictions that rely on Ontario COAs as authoritative evidence of legal authority would be able to continue to do so.
2. Subsequently Discovered Assets
It would also be important to make provision for subsequently discovered assets without unduly complicating the process. The LCO has concluded that the appropriate procedure should depend on the revised total value of the assets.
If the revised total value of the estate remained $50,000 or less, the certificate holder would file a summary statement with the court disclosing the new assets and their value and the court would issue an amended certificate extending the certificate holder’s authority to the new assets. In order to provide applicants with sufficient incentive to discover and list all estate assets in the original application, only one amendment to a Small Estates Certificate would be permitted.
If, on the other hand, the revised total value of the estate exceeded the $50,000 value limit, the certificate holder would be required to apply for a grant of probate under the regular stream. The Small Estates Certificate would remain valid authority for actions already carried out by the certificate holder according to subsection 47(1) of the Trustee Act. However, a COA would be required in order to administer the newly discovered assets. This is an important limitation to the small estates process intended to prevent estate representatives of larger estates from abusing it.
3. Consequences for Financial and Other Institutions
Financial and other institutions relying on a Small Estates Certificate would be statutorily protected just as they are currently under section 47 of the Trustee Act. The Small Estates Certificate would contain a statement making this clear so that institutions would be more likely to accept it.
Otherwise, a small estates process would have no direct impact on financial and other institutions. They would remain bound by their own legislative framework and would retain their current discretion to decide what evidence of legal authority will be required to release estate assets or otherwise deal with the estate representative.
However, a small estates process would likely have a significant practical effect in reducing probate waivers. Financial and other institutions would have a strong incentive to refuse to exercise their discretion to release assets without a Small Estates Certificate. The simplified process would make it more reasonable to expect their clients to apply for a Small Estates Certificate and this would give financial institutions added protection from liability.
Since financial institutions would still have discretion to release low value assets without probate, where certain estate assets have been released, an estate representative might still wish to use the small estates procedure in order to collect the remaining estate assets. In these circumstances, the release of some assets without probate would not affect the total value of the estate for the purpose of meeting the $50,000 value limit. The value limit must be based on the total value of all estate assets whether or not they are already in the possession of the estate representative. Otherwise, the estate representative of a large estate may be able to use probate waivers in order to reduce the size of the estate to fit under the $50,000 value limit. For example, the estate representative of an estate worth $100,000 may already have possession of estate assets worth $60,000. This should not then entitle him or her to file a small estates application in respect of the remaining $40,000.
Some may consider the reduced availability of probate waivers as a regressive consequence of this reform since certain small estates may be required to go through probate where they would otherwise have qualified for a probate waiver. However, this loses sight of the purpose of probate. It is more than an administrative process for gathering estate assets. The system continues to have a valuable role providing legal protection to estate representatives, beneficiaries and creditors. Also, it must be remembered that even a probate waiver application has its share of administrative requirements to complete, including indemnity agreements in many cases. The goal of a small estates procedure is to provide small estate representatives with the option of obtaining court-supervised probate without appreciably more cost and difficulty than they would experience in seeking a probate waiver (and perhaps even less in some cases). Nevertheless, these recommendations would not affect the discretion of institutions to waive probate.
The Law Commission of Ontario makes the following recommendation:
7. (a) The Estates Subcommittee of the Civil Rules Committee prepare and the Ontario government enact amendments to Rule 74 of the Rules of Civil Procedure and the Estates Act as necessary to provide that a Small Estates Certificate issued under a small estates procedure have the same legal effect as a Certificate of Appointment of Estate Trustee in the regular probate stream, with the sole distinction that authority under a Small Estates Certificate be limited to the specific assets listed in the application.
(b) The small estates procedure provide that where additional estate assets are discovered subsequent to the issuance of a Small Estates Certificate,
(i) if the revised total value of the estate does not exceed $50,000, the estate representative may file a statement disclosing the new assets and the court may amend the Small Estates Certificate accordingly,
(ii) applicants be limited to one amendment per estate,
(iii) if the revised total value of the estate exceeds $50,000, the estate representative must apply to administer the new assets by filing an application for probate under the regular stream.
H. Estate Administration Tax and Estate Information Return
Small estates probated under a small estates process would continue to be responsible for payment of the estate administration tax. For estates worth $50,000, the tax is $250. In spite of the small amount at stake, the audit and verification regulation recently issued by the Ministry of Finance would require that estate representatives of small estates also complete an Estate Information Return (EIR). The LCO is concerned that this additional process would drive up application costs and potentially undo the good being done by a small estates procedure.
The audit and verification regulation has only recently been introduced and it is not yet possible to assess the degree of difficulty that it will pose for unrepresented applicants of small estates. However, as noted by practitioner Vince De Angelis,
While the amount of tax being paid by estates should not be any greater than currently applicable, the costs of complying with the new reporting requirements and the challenge of assessments where necessary will likely increase the costs incurred by the estate. This will only cause further delays and complicate the administration of even the most modest of estates. Add to this the additional exposure to civil and criminal penalties faced by estate representatives and their advisors under the EATA [Estates Administration Tax Act], finding someone to act as the estate representative may become a challenge.
Although the EIR requires the same kind of information as would be required in a small estates application form, the EIR is designed for all estates regardless of value, including estates with significant and complex assets. Therefore, the form is seven pages long and includes a degree of detail that is not applicable to most small estates. For example, the applicant must include the assessment roll number and the property identifier number for each parcel of real property owned by the estate. He or she must specify the percentage of the deceased’s ownership in the property and subtract any encumbrances. For investments, the name and address of the broker or agent, as well as the name of the issuer, the type and details of the instrument or account number and the number of units is required. For vehicles, the vehicle identification number or the hull serial number is required. In the section titled “Other Assets”, the applicant is required to list business interests, copyrights, patents and trademarks, among other things. This may well be confusing to applicants acting on their own even where the small estate does not contain most of the assets listed on the form. The concern here is similar to the concern for unrepresented applicants navigating the 65 forms under Rule 74 in order to find the one or two forms that apply. The very presence of a large amount of extraneous information still obligates the applicant to consider and make the determination that it is extraneous.
Therefore, the LCO is concerned that the detail required by the EIR and the process required to complete and file it would be intimidating for many estate representatives of small estates. In some cases, they may be compelled to obtain legal assistance. In other cases, they may be discouraged from filing for probate altogether. Harkening back to the principles underlying this Report, imposing the EIR requirement on small estates is arguably an example of the burden of administration being disproportionate to the value of these estates.
And the rationale behind the EIR, to enforce payment of estate administration tax in order to maximize tax revenue, is less relevant to small estates where the tax revenue is very small. It seems unlikely to be cost-effective for the Ministry of Finance to review EIRs for amounts less than $250 or to attempt to enforce such small tax liabilities. In any event, for small estates, the LCO suggests that the goal of accessibility to probate outweighs the value of any lost tax revenue that might be recovered.
The LCO is not suggesting that small estates be exempt from any scrutiny around the value of the estate but merely that this scrutiny be proportionate to the amounts at issue. The application form being recommended in this Report would require that the applicant list individual estate assets and their value. This is already a significant improvement over Ontario’s current application form which requires only a single number representing the total value of the personal and real property of the estate respectively.
The LCO’s recommendation for an application form requiring a breakdown of estate assets and their individual value is also in keeping with small estates procedures in other jurisdictions. For example, in Saskatchewan, the application requires that each estate asset be listed along with the name and address of the person possessing it and its value. The proposed Northwest Territories application form would require the same. BCLI’s proposed form would have required a breakdown and description of each asset and its value.
The LCO believes that the recommended small estates process would provide sufficient formality and would require enough details about the estate to provide effective deterrence against fraudulently underreporting assets. Therefore, although small estates would continue to be required to pay estates administration tax, the LCO has concluded that they should be exempt from the new requirement to file an EIR.
The Law Commission of Ontario makes the recommendation that:
8. The Ontario government amend the Estate Administration Tax Act and its regulations to exempt estates filing under the small estates process from the requirement to file an Estates Information Return.
I. Online Delivery of a Small Estates Process
There were several suggestions during the consultation process for designing a small estates process to be delivered online. In particular, several practitioners pointed to Ontario’s Electronic Land Registration System (E-LRS) as a possible model for an online small estates procedure. One legal technology expert sent in a written submission for an online small estates process modeled after the E-LRS in which lawyers authorized by the Law Society of Upper Canada (LSUC) would issue COAs or refer applications to the court. The proposal noted that an online system could allow for automatic service of applications to the OPGT or the OCL or both. New York’s value limit of $30,000 was suggested as an initial value limit with the idea that this might be raised to $100,000 once the new process proved effective.
The similarities between the probate and land titles systems generally suggest that the E-LRS might be an appropriate model to consider in looking at a small estates procedure for Ontario. The land titles system is intended to establish legal entitlement to deal with real property, just as the probate system is intended to establish legal entitlement to deal with an estate. There is a difference in that the registered land owner has beneficial ownership of the property whereas an estate trustee is just that, a trustee for the beneficiaries of the estate. However, the intent of both systems is to protect those entitled to property and promote commercial certainty by providing the public with reliable information as to the true owner/representative of the property.
The E-LRS allows authorized users (lawyers or other professionals) involved in a land transaction to create, sign and register documents online.  The user has an account on the system and is responsible for paying costs and the land transfer tax. In a land transaction, the users representing the seller and buyer can “message” each other in order to create a document that is acceptable to both, after which the users sign electronically and one user registers the final document. The registration takes effect immediately but is later reviewed by registry office staff for form and completeness.
In cases where the title of land is to be transferred from a deceased to the estate representative, the estate representative’s lawyer must register a “transmission application”. The lawyer must make a “law statement” attesting that the owner is deceased and the estate representative has the authority to transfer the property. The lawyer is required to retain in the files, evidence supporting these statements. Lawyers maintain insurance to cover the risk of liability here.
In spite of the similarities between probate and the E-LRS, there are key distinctions in their function that, perhaps, explains the enduring role of courts in administering probate and limits the usefulness of the E-LRS as a model. For example, where a land transfer is recorded in the E-LRS, the parties interested in the land are typically alive and able to protect their own interests. In probate, part of the court’s role is to protect the intentions of the deceased who is, by definition, unable to protect them personally.
Another distinction between the two regimes is the approach taken to deterring and compensating for fraud. In the E-LRS, this is addressed in several ways. There are strict requirements for establishing the client’s identity and each party on a transaction must be represented by independent lawyers. The system is also protected by restricting access to registered users only. In addition, the Land Titles Assurance Fund was established to provide compensation for losses due to fraud as well as administrative error. The probate system also encourages individuals with interests in an estate to rely on the issuance of a COA. This is achieved through section 47(1) of the Trustee Act which serves to validate actions taken under the authority of the COA, even where the COA is later revoked. However, in the probate system, this statutory protection is offered only in the case of honest error and is expressly withheld in the case of the estate trustee’s fraud.
The relative vulnerability of the interests at stake in the probate system and the relative lack of protection against fraud indicate that the balance between legal protection and accessibility in a small estates procedure should be struck somewhat closer to the legal protection end of the spectrum than is the case in the E-LRS.
In its Issues Paper on the administration of small estates, the South Australian Law Reform Institute (SALRI) also raised the idea of an online small estates process, again without the supervision of the court. It reasoned as follows:
Public notice of an assumption of responsibility to administer a small estate under a legislated process need not require filing any documents with the court or the involvement of court officials in receipt or stamping of declarations and facilitating record searches. The same objectives could be achieved at less expense and trouble by the online lodgement on a Government website of a declaration in exactly the same prescribed form, including a statutory release from liability for third parties relying on the registered assumption of authority.
This reasoning is preliminary and SALRI has not yet released a Final Report in this project. However, the LCO believes that there are other factors to consider in dispensing with court supervision in addition to the relative degree of expense and trouble involved. Also to be taken into account is the potential for increased fraud without the sobering influence of court supervision, as well as potential legal consequences for other legislative provisions that rely on court supervised probate (such as legal standing for third parties challenging a declaration).
The LCO has concluded that an online small estates process operating without court sanction would not be appropriate for small estates. However, there is a great deal of merit in exploring the online delivery of a court-supervised small estates procedure in Ontario.
The Ontario government has made a number of important initiatives in providing online court services over the past several years. A significant project has been to develop an online process for filing small claims court materials. After a six month pilot project, this program was rolled out earlier this year. Individuals and businesses can now file small claims and pay court fees online as long as the claim is for a fixed amount. A Quick File program is available for professionals using the system and, for individuals, there is a Filing Wizard through Service Ontario’s website which guides individuals through the process of inputting information. A users’ guide provides further instructions in plain language and includes snap shots of webpages that the user should expect to see. Big blue arrows point to the correct buttons to be clicked at each stage of the process. Certain information such as the amount of pre-judgment interest to be claimed is generated automatically based on the date inputted and the applicable rate. Supporting documents may be uploaded as part of the form being submitted. Where no defence is filed, a default judgment may be requested online.
While it is early yet for evaluation, Ontario’s small claims online filing system appears to be an excellent means of reducing the cost and increasing the accessibility of this particular legal process. A large proportion of the institutional knowledge developed by the government with this initiative would be equally applicable to the design of an online small estates process. This kind of delivery platform is perhaps particularly suitable in the probate context where there are typically no opposing parties and there is a significant administrative component to the process. Therefore, the LCO suggests that an online delivery platform would be an equally beneficial initiative to improve accessibility to probate for small estates.
The Law Commission of Ontario makes the following recommendation:
9. a) The Ministry of the Attorney General leverage the institutional expertise gained in designing its online small claims court filing process for the purpose of designing a similar online filing system for a small estates procedure, with the goal of reducing the application costs of probate for small estates and increasing the efficiency of the system overall.
b) A paper process be retained for applicants who cannot or do not access online services.
J. Legal Information on the Purpose of Probate and the Small Estates Process
Probate is suffering from a significant image problem. It was widely reported in consultations that people do not appreciate the legal protections provided by the probate system. Many seem to perceive the system as no more than a mechanism for collecting estate administration tax. Others view the paperwork as meaningless government bureaucracy. Still others have an exaggerated idea of the cost of probate and do not believe that there is value in hiring a lawyer to assist with the process. The consultations revealed that the cost of hiring a lawyer to obtain probate is generally reasonably affordable except in the case of very small estates.
The conversation about probate tends to be whether it is “needed” or not to access estate assets. There is less recognition of the value of probate in protecting the beneficiaries and creditors from fraud or improper administration and the estate representative from liability for relying on an invalid will.
Numerous stakeholders, including the Canada Revenue Agency, called for more public education, particularly around the need for proper authorization in order to represent an estate.
Improved understanding about the role of the probate system and its cost would help estate representatives of small estates make better decisions as to whether or not to file for a Small Estates Certificate.
It is just as crucial that estate representatives have a clear understanding of the process of obtaining a Small Estates Certificate. Meaningful access to any legal process, including probate, requires more than the formal standing to invoke the process. The tools necessary to make use of the process, information guides, forms and instructions must themselves be accessible to the user. As Hakim notes,
Simply reducing the complexity of the process is not sufficient. To be successful, any simplified procedure must be accompanied by significant legal self-help services and education tools, in order to also reduce the perception of complexity, so that individuals feel empowered to utilize the mechanisms available to them.
A clear understanding of one’s legal rights is also important in order to determine when to hire a lawyer rather than representing oneself. This is particularly the case for estate representatives of small estates who may be less inclined to seek out individualized legal advice.
As discussed above in chapter IV.E.2, there is a need in Ontario for better legal information on the responsibilities of an estate trustee, the requirements for navigating the probate process and the reasons why information is required at each step of the process. Existing resources are limited in scope and are not entirely successful in explaining legal concepts in language that is fully accessible by laypeople.
Therefore, one of the LCO’s key recommendations is the creation of a plain language guide explaining the purpose of probate and how to navigate the small estates process. It would also benefit those using the regular probate stream, particularly self-represented applicants, to have available a plain language guide.
Although probate involves complex legal concepts, this should not preclude a plain language guide that is effective to take laypeople through the process step by step. During consultations, a government official and at least one practitioner drew an analogy to tax guides issued by the Canada Revenue Agency (although the extent to which these guides achieve their purpose is a matter of opinion). To be effective, a comprehensive, government-authored guide to the purpose of probate and the process of obtaining a small estate certificate should be made widely available online, in court offices and funeral homes through Community Legal Education Ontario (CLEO) and other public institutions. It should be published in English, French and other languages reflecting the linguistic diversity of Ontarians.
Some jurisdictions have already made a concerted effort to provide estate representatives of small estates with plain language guidance through the process. In Canada, Manitoba has been relatively successful in this respect. Information on Manitoba’s summary administration process is available on the Community Legal Education Association Manitoba (CLEAM) website. CLEAM has created a plain language Guide to Administering Estates under $10,000. There is also a preliminary general document on probating an uncomplicated estate worth less than $100,000. These guides are clearly worded and easy to read and are useful models for designing a similar plain-language guide to an Ontario small estates procedure.
New York’s small estates affidavit procedure (SEAP) discussed above is successful in part due to a comprehensive web of supports including simplified instructions, plain language guides, court help centres and programs for assisting unrepresented applicants.
A 2005 manual by the Canadian Council on Administrative Tribunals (CCAT) recommends that administrative tribunals undergo a literacy audit to determine how best to improve access to the tribunal through use of plain language, responsiveness to the individual needs of those using the tribunal, staff training and so forth. This is perhaps a longer term goal for the probate system.
The Law Commission of Ontario makes the following recommendation:
10. a) The Ministry of the Attorney General, in partnership with institutions such as the Law Society of Upper Canada and other appropriate service organizations, publish an authoritative, plain-language guide addressing the following:
i. the purpose of the probate system, the responsibilities of estate representatives and the relative costs and benefits of obtaining probate and
ii. how to navigate the small estates process.
b) This guide be made widely available online, in court offices, funeral homes and other relevant public institutions.
c) In addition to English and French, this guide be published in other languages reflecting the linguistic diversity of Ontarians.
K. Simplified Forms and Online Forms Assistant
Hand in hand with a plain language guide to probate is the need for simplified language in the application materials themselves. Currently, there are a myriad of forms under Rule 74 with technical language that may pose difficulty even for lawyers who are not familiar with estates law. In order to be accessible to unrepresented estate representatives, the small estates application form, notice form and accompanying instructions would have to be much simpler than these current forms.
There is a limit to the extent that forms can be simplified without undermining their effect. Small Claims Court is another court process that is organized around forms. In writing about Small Claims Court, Shelley McGill has noted the need for a delicate balance between too few and too many forms:
Moderate use of standard forms can further several small claims court objectives. They can make the system easy to use for both administrators and litigants, inform users of the rules and promote a fair forum through meaningful disclosure.
However[,] balance is the key to success; too many forms overwhelm the user and bog the system down in paper. Long forms are intimidating, appear complicated, and may obscure the very information they are trying to convey. Too few forms leave the user ill-informed about the process and the opposing party’s case.
B.C.’s new Probate Rules include rather lengthy forms for the purpose of guiding applicants through the process. The forms integrate step-by-step instructions and make use of standardized language that allows applicants to simply check the appropriate box. We believe that this is a promising approach for Ontario, although a much shorter form would be sufficient for the small estates process that we recommend.
An important element of a simplified application form would be an online forms assistant to guide applicants step by step through the small estates application requirements. At each step, an information box would explain the significance of the question and information required and would provide the applicant with possible responses. Some of the questions would require that the applicant fill in information, but the applicant would also be able to answer other questions simply by ticking the appropriate box. The forms would also be available in hard copy. An online forms assistant would differ from an online filing system since the applicant would be required to print out the completed materials and manually file them with the court. An online forms assistant would already be part of the online delivery system in recommendation 9a above. However, where online delivery is not yet in place, an online forms assistant may be an incremental step towards this bigger goal.
One promising model for a small estates forms assistant is the interactive small estates affidavit procedure (SEAP) in New York. SEAP is a part of CourtHelp which is a broader initiative for providing on-line legal information and a self-help system for unrepresented litigants. The SEAP webpage describes the program and lists the eligibility requirements in clear language. A checklist sets out the information needed to complete the program. Key terms are linked to definitions and further instructions. Computer requirements are explained and then the user is welcome to begin the SEAP interactive module.
Upon beginning the SEAP module, the screen displays a virtual guide standing on a pathway with enumerated stopping points leading to a courthouse in the distance. As questions are answered, the user appears to proceed along the path towards the courthouse. The virtual guide communicates with the user through word bubbles that present text. The text is simply worded. For example, the guide advises that you would fill out the affidavit “to ask the Surrogate’s Court for the authority to keep or give away the property of someone who died.”
The user answers a series of questions that are automatically compiled into a completed Affidavit of Voluntary Administration. As part of the process, SEAP informs users of each of the duties of an estate representative and requires them to click a box agreeing to each one before proceeding to the next. The completed form also contains clear instructions on how to file the Affidavit with the court, the duties of a voluntary administrator, what to do if additional assets are found after filing the affidavit, and so on.
SEAP has received some positive user feedback, most of which suggests that users perceive the program as helping them to successfully complete the affidavit procedure without a lawyer’s help, including the following comments:
Very helpful to complete forms at home on-line before coming to court. I feel more prepared with this process.
Really appreciate the opportunity to prepare the forms online. It made the process go faster. My papers are neater and more accurate.
Saved me time and I did not have to take time off from work to travel to a different county’s clerk office.
Appreciate the easy use since I am not a lawyer.
This is a great website, I waited all this time to file because I couldn’t afford a lawyer to do this.
Love how they confirm your answers, verify so it’s done correctly.
Very helpful, [court staff] pleasant people to work with. They made this experience very easy for me and made me feel very comfortable.
SEAP has been modified since its inception in 2009 to respond to user feedback. In 2011, the SEAP website received over 23,000 unique site visits.
The NYS Courts Access to Justice Program (NYA2J) has developed a best practices guide for designing and administering court document assembly programs such as SEAP. NYA2J has also developed best practices for structuring court help centers and programs to assist unrepresented litigants as well as best practices for help center staff in providing legal information.
SEAP apparently goes a long way in making manageable a complicated “simplified” process. It does appear possible for people to successfully file the Small Estate Settlement form without a lawyer and everything is delivered from a single web platform, reducing the likelihood that individuals will search for potentially erroneous information elsewhere.
Ontario may learn from New York and other jurisdictions in designing simplified forms for a small estates process. However, it is important that simplification is not gained at the cost of legal protection and that a small estates process provide also legal supports such as a telephone help line, discussed immediately below.
Simplification is also a desirable goal in relation to Ontario’s probate system generally. The LCO suggests that the forms under Rule 74 should be reviewed with a view to consolidating the number of forms and adopting simplified language where possible. In particular, the LCO suggests that the commonly understood term “probate” be restored to the Rules in place of the current official term, Certificate of Appointment of Estate Trustee with or without a Will.
The Law Commission of Ontario makes the following recommendation:
11. a) A small estates application form, notice form, instruction sheet and other application materials be designed with simplified language accessible to unrepresented applicants, beneficiaries and others interested in the estate.
b) If the small estates process is not being delivered online pursuant to Recommendation 9, an online forms assistant be developed to guide applicants step-by-step through the application process and educate them as to the meaning and effect of each of the application requirements.
L. Telephone Help-Line for Estate Representatives
Even a well-developed small estates process with a plain language guide to the process, simplified forms and online delivery will not be accessible to all Ontarians. Some small estates will raise issues that can only be addressed through individualized legal advice. Some estate representatives will continue to experience language, literacy, technical and other barriers precluding them from navigating the system without assistance.
Currently, estate representatives who cannot afford a lawyer tend to seek assistance from financial institutions, court staff, funeral directors and friends and neighbours, among others.
Some practitioners suggested that financial institutions may be in a conflict of interest in certain circumstances when they advise their clients about probate matters. One practitioner raised a concern about a new professional designation, executor advisors, that may lead unqualified individuals to provide unlicensed legal advice.
Court staff field many questions from individual estate representatives. However, they are limited in the assistance they can provide by significant resource constraints, as well as by the prohibition against giving legal advice.
The consultations revealed that the assistance received from this diffuse group of informal advisors is frequently inaccurate and inconsistent. The LCO suggests that a centralized source of “real time” assistance would reduce these inaccuracies and gradually clear up some of the widespread misperceptions about the probate system. It would also be an objective source of assistance staffed by experts (although not necessarily lawyers). A telephone help line would be an appropriate alternative source of assistance for estate representatives who are not comfortable with or cannot access the online process and wish to speak to a “real person”. In order for a help line to be meaningful for Ontarians whose first language is not English or French, it would be important to offer assistance in other languages in common use.
A telephone help line would be valuable not only to estate representatives of small estates but also to estate representatives filing applications under the regular probate stream.
A modest investment of resources would be necessary to set up and staff a telephone help line. However, a help line would also conserve resources, particularly by relieving the current load on court staff. Over time, it should lead to fewer mistakes on probate applications which would reduce the resources necessary to process them.
Consideration should be given as to how a probate help line initiative might be integrated into existing access to justice projects in Ontario. For example, community legal clinics in Ontario are currently engaged in a long list of transformation projects listed at the Association of Community Legal Clinics of Ontario website. Also, the Action Group on Access to Justice (TAG) is facilitating several projects in which different service organizations collaborate on access to justice initiatives.
Of course, a telephone help line, like most legal supports, would not be sufficient on its own. There will be applicants who cannot benefit from a help line due to literacy, language or other barriers. For this group, legal representation or personal assistance from other trusted intermediaries may be necessary.
The Law Commission of Ontario makes the following recommendation:
12. The Ministry of the Attorney General, in partnership with institutions such as the Law Society of Upper Canada and other appropriate service organizations, establish a telephone help line for estate representatives of small estates, staffed by knowledgeable advisors and promoted widely as a resource for legal assistance in navigating the small estates process.
M. Cost-Sensitive Legal Advice
Lawyers play a valuable role in probate matters, not just in guiding their clients through the application process, but also explaining the legal consequences of probate and advising them as to their role and responsibilities as estate trustee. Some practitioners felt that legal assistance is a practical necessity in the probate system for which people should be willing to pay a reasonable amount. The cost of hiring a lawyer to assist in obtaining probate ($1,000 to $5,000 for a straightforward estate) will be reasonable for most Ontario estates. For these estates, it makes good sense for an estate representative to hire a lawyer.
Legal representation would be equally valuable to estate representatives probating small estates under a simplified small estates process. Although the process may be simplified, the legal effect of probate and the responsibilities of the estate representative remain complex concepts that may not be fully appreciated by an unrepresented estate trustee. As discussed in chapter II above, estate representatives often misunderstand probate to be nothing more than an administrative matter involving a few forms.
There may also be additional reasons why legal advice is advisable for estate representatives of small estates. Some estate representatives will experience language or other barriers that make it difficult for them to access the legal system. One clinic lawyer indicated that their clients generally do not have the skills to obtain probate on their own, especially where there is no will. Since the estates are not large enough to justify hiring a lawyer, clients abandon the assets. There was a concern that even a simplified court-based procedure would not be accessible by their clients.
Although legal advice is valuable in probating Ontario estates of any value, it is a reality that some estates are too small to cover the cost of legal representation or, at least, too small to make legal representation worthwhile.
There are valuable initiatives in Ontario offering low-cost legal advice to Ontarians in certain circumstances. However, for the most part, these are unavailable for probate matters. For example, the Law Society of Upper Canada (LSUC) operates a Lawyer Referral Service which matches people with lawyers in particular practice areas. These lawyers will provide a free 30 minute consultation, after which their fee is negotiated privately with the individual. JusticeNet is a service consisting of a group of lawyers in different practice areas who provide legal advice to low income clients at a reduced rate. Unfortunately, the areas of law covered apparently do not include estate administration or probate. Legal Aid Ontario states that it “does not cover Power of Attorney or wills and estates”, but that some community legal clinics may be able to assist. However, according to a clinic lawyer, community clinics generally do not take on estates matters with the result that clients must abandon the estate assets if they cannot obtain other assistance.
Access to legal services has been identified as a pressing concern throughout the civil justice system. The 2010 Report of the Ontario Civil Legal Needs Project, Listening to Ontarians, recognized that traditional legal representation for family and other civil matters will not be accessible to many low and even middle income Ontarians. It suggested a different approach to accessing legal services based on a menu of options depending on the type of legal assistance required. For example, it suggested there may be a role for unbundled legal services, paralegal representation, pro bono services such as offered by Law Help Ontario, accurate and reliable information on the Internet, telephone advice hotlines (with competent staff) and so on. However, the Report recognized that in spite of the availability of these services, in some cases Ontarians will require access to a qualified lawyer or paralegal in order to achieve a just and fair outcome. This is particularly the case for many Canadians who do not have the literacy level to make effective use of legal information in written form.
The LCO addressed the need for affordable access to family law services in our 2013 Report, Increasing Access to Family Justice Through Comprehensive Entry Points and Inclusivity. We pointed out significant barriers that may prevent people with family disputes from benefiting from the substantial amount of family law information already available online and through specialized programs. For many people, these standardized sources of legal information were of limited usefulness without some personal assistance in applying the information to their own situation. The Report suggested that non-lawyer “trusted intermediaries” might be trained to provide assistance to these individuals.
Similar considerations may apply in the context of probating small estates. However, probate is materially different in some respects from other parts of the civil justice system. Typically, an uncontested probate application will not be adversarial. Nor will it involve an “essential legal need” described in the CBA’s Equal Justice Report as
[T]hose that arise from legal problems or situations that put into jeopardy a person or a person’s family’s security – including liberty, personal safety and security, health, employment, housing or ability to meet the basic necessities of life.
Several of the practitioners we spoke with drew a distinction between two components of the legal services commonly provided by estates practitioners. One component is assisting the client with completing and filing the probate application along with supporting materials. In an uncontested application, this may largely be an administrative task. The other component is advising the client about the legal significance of the application requirements and the legal significance of probate, as well as the role and responsibilities of acting as estate trustee. Practitioner stakeholders emphasized the importance of this role given the complexity of the probate system generally and the potential for personal liability by estate trustees. Several practitioners rejected the idea of a do-it-yourself small estates process specifically because they felt that this general advisory role could not be properly outsourced.
The LCO agrees that it is important for all estate representatives to understand the legal responsibilities and risk of liability that accompany a successful probate application regardless of the value of the estate in issue. However, it may be possible in a small estates process to separate these two components of legal services in order to reduce the overall cost of probate while ensuring that estate representatives receive the legal advice necessary for their role.
First, there should be a cost-effective means of providing general legal information to estate representatives filing small estates applications. This is particularly important in probate matters so that the applicant understands the significance of acting in a representative capacity. Much of the information that estate representatives should understand in order to fulfill their role will be standard for all estates regardless of their make-up or value. Therefore, it should be possible in many cases for this information to be relayed in a standardized manner, especially since, unlike most legal processes, probate is often not adversarial.
There are several possible delivery methods for this kind of standardized legal information. Above, we make recommendations for two such possibilities: a plain-language guide to probate and a telephone help line. Other possibilities might involve a half hour appointment with a volunteer lawyer or a law clinic or public seminar program designed to educate the estate representative generally about the role and responsibilities of being an estate trustee. It might be an online information module that applicants complete as part of their application. It might be modeled after the family court Mandatory Information Program (MIP) in which parties to a contested claim attend an information session on the effects of separation and divorce, the court process and alternatives to court. It might be some combination of these. Whatever the delivery method, the idea would be to provide standard legal information rather than legal advice about the estate being administered. However, if the small estate raised particular complexities, the applicant might be referred to a lawyer for individualized legal advice.
Since some estate representatives will require legal assistance with even the simplest form, additional legal supports should be available for this group. A program such as JusticeNet may make it possible for estate representatives of small estates to hire a lawyer at a reduced rate. Or, if feasible within financial restraints, some legal clinics might expand their services to include probate applications for clients with significant barriers. These kinds of initiatives might be connected to one or more of the transformation projects already underway by community law clinics in Ontario. If so, eligibility rules would have to be modified to reflect the value of the estate rather than the income of the client.
It is also worth considering the possibility of paralegals assisting with probate applications for small estates. Although paralegals are not currently licensed to represent clients on probate applications or estate administration, some stakeholders suggested that their permitted scope of practice might be expanded to cover these areas.
Law students may also be of assistance where properly supervised by a lawyer. Student Legal Aid Services Societies (SLASS) operate out of Ontario’s seven law schools. In order for SLASS to play this kind of role, the current scope of their services would have to be enlarged to include probate matters and, again, LAO eligibility rules would have to be modified.
The Law Commission of Ontario makes the following recommendation:
13. a) In the case of small estates, estate practitioners consider separating two components of traditional legal representation (distinguishing the provision of general information about probate from individualized advice about navigating the probate process) to allow tailoring of legal supports to the particular needs of applicants.
b) In addition to Recommendations 10 and 12, the Ministry of the Attorney General, in partnership with institutions such as the Law Society of Upper Canada and other appropriate service organizations, consider further methods of delivering standardized information about the purpose of probate and the probate process to estate representatives of small estates.
c) Targeted legal assistance for estate representatives of small estates be offered on a needs basis through a wider variety of service organizations such as community legal clinics, student legal aid clinics or programs such as JusticeNet.
N. Encourage Will-Making
Countless times in the consultations, the plea was made to promote will-making in order to reduce the risk of problems later on in obtaining probate and administering the estate. Last year, a public awareness campaign aimed at encouraging will-making was launched by the Ontario Bar Association. The LCO believes that a similar or expanded campaign promoting professionally drafted wills would assist in preventing some of the difficulties otherwise encountered in obtaining probate for small estates. Instead of targeting educational initiatives at high wealth Ontarians engaged in estate planning, these should be directed instead at ordinary Ontarians who are more likely to leave a small estate.
The Law Commission of Ontario makes the following recommendation:
14. The Ministry of the Attorney General, in partnership with institutions such as the Law Society of Upper Canada and other appropriate service organizations, collaborate on a public awareness campaign for educating the public on the importance of making a will and appointing an executor for Ontario estates regardless of value.
O. Publicly Searchable Estates Database
The consultations revealed that one of the key factors tending to complicate applications for probate and drive up legal costs is disputes among family members. Some of these disputes arise because of a lack of information as to the respective rights and responsibilities of the estate trustee, the beneficiaries and others with a potential interest in the estate.
Even an ideal probate system cannot eliminate family conflict. However, it can seek to minimize conflict by adopting fair and transparent procedures. There is always room for improvement here. Hakim suggests that the current rules for providing notice of a probate application lack transparency. This was corroborated during consultations. Court staff and the OPGT both noted that they receive regular phone calls from individuals attempting to determine if an estate exists and if they may have some interest in it.
There is some variation among the provinces as to the degree of notice required as part of a probate application. Most provinces have similar notice requirements to Ontario. However, Manitoba legislation requires no notice whatsoever to beneficiaries, although at least one Manitoba practitioner provides notice to beneficiaries as a matter of good practice. Nova Scotia does require notice to beneficiaries, although not until after the grant has been issued rather than beforehand. There is also variation in the type of information required to be included in the notice, ranging from the bare fact that an application is being made to a list of all those interested in the estate and a copy of the will. If more and better information were available to beneficiaries and potential beneficiaries as part of the application for probate, this would serve to manage expectations and help to avoid disputes from arising in the first place.
Currently, Rule 74 requires that notice be served on “all persons entitled to share in the distribution of the estate”. It is up to the applicant to determine who is entitled to be served and there is no direct way for individuals who are not served but believe they might have an interest in the estate to learn about their claim. In fact, these potential beneficiaries may not even be aware that the deceased has passed away.
A publicly searchable electronic database of deaths and probate applications would go some way to alerting people with a potential interest in an estate of the existence of the estate and the person applying to be estate trustee. Several stakeholders expressed interest in the creation of this kind of public estates database. This would be another way that technology would be useful in improving the probate process for small estates.
The more difficult issue is what kind of information should be publicly available in an estates database. The information contained in wills and probate applications is highly personal. There is a concern that people will be dissuaded from making a will or filing for probate if they feel that, in doing so, their private information may become available for public consumption. On the other hand, wills are currently accessible by the public under section 27 of the Estates Act. An online estates database would be required to strike an appropriate balance between maintaining openness in the probate system and protecting this kind of private information from unrestrained dissemination in the public sphere.
In particular, naming estate beneficiaries in a public estates database would be problematic. The Office of the Children’s Lawyer expressed its concern about the danger for minors and other vulnerable persons if information about their beneficial interests in an estate were to be publicly available. The LCO agrees that this would violate the privacy interests of all beneficiaries whether or not they are otherwise vulnerable and, for this reason, does not recommend that the names of beneficiaries be accessible in an online estates database. Instead, an estates database should list only the name and address of the deceased, the date of death (confirmed by the Office of the Registrar General) and the name and contact information of the estate trustee or applicant to be estate trustee. This information would allow anyone with a potential interest in the estate to learn whether or not an application for probate has been filed which would then allow them to take steps to protect their interests.
The Law Commission of Ontario makes the following recommendation:
15. The Ministry of the Attorney General, in partnership with the Office of the Registrar General, develop an online, publicly searchable database of Ontario estates containing the following information:
i. name and address of the deceased,
ii. date of death,
iii. name and contact information of any applicant for either a Small Estates Certificate or a Certificate of Appointment of Estate Trustee, and
iv. confirmation when a certificate has been issued.
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