How to Settle a Small Estate

Woe is you for estate trustees faced with settling the estate of a homeless or destitute relative. Everyone deserves to die with dignity.

The Torments of Small Estates

Until Ontario revised estate administration taxes for small estates, executors could spend huge amounts of time probating next to nothing and pay for the privilege. While probate fees have were waived Jan. 1, 2020 for estates under $50,000, that could just be the start of it.

Who Probates an Estate Anyway?

When The Law Commission of Ontario asked estate executors, they found less than 25% of Ontario estates made it to probate court and most were valued at under $100,000. Imagine an estate worth $1,000 to $2,000 left behind by a family member or friend who made a vow of perpetual poverty or dies suddenly while homeless. Given the time and effort required, you may want to reconsider probating unless:

  • the deceased left no will
  • the will may not be valid
  • the will didn’t name an estate trustee, also called executor or personal representative, or the heirs dispute the appointment
  • a bank or financial institution wants proof of your legal authority to administer the estate
  • they owned a house or other property and it didn’t pass to a surviving joint tenant
  • some heirs are minors or mentally incapable and can’t give legal consent.

Most Canadians Have No Will

Just over 50% of Canadians have no last will and testament. If asked, 30% say they can’t be bothered. They just don’t have enough assets to make it worth their while or so they believe. Dying intestate (without a will) complicates settling an estate even more, especially if it’s modest. Even posting an ad to find a will or the deceased’s creditors can be $400 to $800. It adds up.

No Will, No Access

Now picture walking into a bank or credit union and asking the manager to “just trust you” when you have no will in hand. It’s easy to see why executors or personal representatives have a challenge getting managers to release bank accounts or open safety deposit boxes without probating the estate, even if the proceeds are small. 

Who Do You Trust?

TD Bank found out the hard way what happens when trust is misplaced. Kuwait resident Daisy Monteiro died in 2008, leaving $700,000 in a TD bank account to her daughter. Her sons convinced the bank they owned the funds and had the proceeds transferred to Switzerland while they contested her will. When a Kuwait court ruled the will was valid, Daisy’s daughter sued TD bank to get the money back. It was one expensive lesson.

When a Will is Ancient

Say your family member and witnesses signed a will and affidavit of execution 30 years ago. Your parent, aunt or sibling was young and vital. When they died, they were in their 80s, feeble or arthritic. Their signature could be unrecognizable. Are their witnesses still alive? Their bank may have updated teir signature card, but oversights happen. Can you honestly say in a probate court affidavit that the signature is real or a handwritten (holographic) will is genuine?

The Difference a Small Estate Can Make

When you showed up in probate court with Aunt Betsy’s will, the judge asked for evidence it was legit and her final will. It was took months to gather her assets and appraise them, but she was pretty organized. Now that you have no will and no idea where to look, you will have to get any possible heirs to renounce their right to share in the proceeds and apply for a certificate of appointment of estate trustee without a will. You may have to post a bond for twice the value of the estate (unless you can get it waived). But wait! The assets are just a few thousand dollars. Does it even pay to hire a wills and estate lawyer?

Going With No Probate 

Jerry has $500 in Canada Savings Bonds he forgot about years ago and his beloved Chevy Oldsmobile Eighty-Eight that “might” fetch $700 from a collector. Otherwise, he lived out of his suitcase, travelling around northern Ontario as a work camp cook. With a death certificate from Service Ontario and the original holographic will he gave you 15 years ago, you can apply for a lawyer’s opinion letter and likely transfer his vehicle to your name, then sell it. As for the bonds, if Jerry gifted them specifically to you in his will, the same documents and a simple form will get you the bonds.

Applying for Probate

No luck getting the bank or credit union to budge? A licensed notary public could be your best ally. Their fees are significantly less than what you would pay a wills and estates lawyer. While you won’t get legal advice, you can get help with legal affidavits and probate court forms. Or if going to court is more effort than you want to put in, the bank will eventually transfer the funds to the Bank of Canada. Either way, you got the job done.

Get Help Probating a Small Estate

Axess Law Ontario’s notary publics help you file a certificate of estate trustee application for small estates. We do virtual video calls from the convenience of your home or office 7 days a week, day or evening. Dial 877-522-9377 or in Greater Toronto 647-479-0118 or use our online booking form to make an appointment. Meet in person if you prefer at our Ottawa, Toronto, Scarborough, Vaughan, Etobicoke, Mississauga Winston Churchill or Mississauga Heartland law offices.

Click here to learn more about Axess Law’s notary public services.

Photo by Leroy Skalstad|Pixabay.