Insolvent estates

Learn more about insolvent estates here.

Vehicle-only

Some estates include only a vehicle in the name of the deceased (owned, not leased, by the deceased).

Sometimes it is possible to transfer these vehicles to the sole beneficiary of the estate (often a spouse) without probate although if there is an outstanding loan registered against the car the consent of the lender will likely be required.

Small bank balances only

A common ‘very small estate’ challenge is whether to probate when the estate consists solely of a modest balance in a bank account. If the amount is under $50,000 sometimes the financial institution (bank or credit union) will release these funds to the beneficiary(ies) without probate. The key considerations for a waiver of probate are:

Whether to require or waive probate is entirely at the discretion of the financial institution. You cannot ‘demand’ that they release funds without probate. Each financial institution has their own internal policies and maximum amounts that they will consider for release without probate.
It must be clear who the beneficiaries of the estate are and in what shares.
Each beneficiary must agree that the funds can be distributed without probate.
It must be clear that the estate has minimal debts and no pending litigation.
Each beneficiary must sign and return to the bank a “bond of indemnity”. This is an agreement that each beneficiary will indemnify and hold harmless the bank from any liability related to the release of funds. This indemnity is usually a standard form provided by the financial institution (that is, it is their form and they require it to be signed and returned).

Probate of “small estates” (under $150,000)

Ontario has special rules for probate applications for estates valued at under $150,000.

These rules try to streamline these applications by

removing the requirement that the application be sworn under oath, and
restricting the need to post a bond (or secure a Court order dispensing with a bond) in certain circumstances. Learn more about the rules of bonding for probate applications here.

The Probate for Small Estates rules do not actually speed up the probate process or make it much simpler or easier for many estates nor do they change the rules or process for administration of the estate after probate.

The Probate for Small Estate rules have the most impact when the person applying to be appointed estate trustee was the legally married spouse of the deceased (and not separated for 3 years or more, and not divorced).

Do not use the ‘under $150,000 small estate’ process if the estate assets might actually exceed $150,000. If assets come to light later that push the estate over the $150,000 limit, an entirely new probate application must be filed.

The rules applicable to small estates require the estate trustee to provide notice to each beneficiary of the ‘gross value of the estate’. However, this number can be quite misleading. Estate trustees should communicate to beneficiaries that the actual net estate distributed will be less, as taxes, fees, and expenses will all be deducted from the gross value and reduce the amount available for distribution.

Learn more about the costs of our services for probate of small estates under $150,000 here.