Bonding Probate Applications

Either posting a bond or getting a Court order to dispense with a bond is a fundamental aspect of many probate applications in Ontario.

The purposes of bonding estate trustees

The purpose of requiring the applicant for a certificate of estate trustee (probate) to post a bond is to protect the creditors and beneficiaries of the estate.

The bond provides a back stop in case that debts are not paid, the estate is not properly administered, or properly distributed to the beneficiaries of the estate.

Clearly, a bond is particularly valuable if the estate trustee could strip the estate and leave the country.  It is relevant – but much less so – if the estate trustee resides in Canada.  For instance, if the primary liability of the estate is likely to be income taxes, then CRA has the same collection remedies regardless of where the estate trustee resides in Canada, but much fewer remedies if the trustee is not resident in Canada.

Bonding for intestacies (no Will)

The requirement to post a bond – or get an Order dispensing with this requirement – applies to probate of all estates when there is no Will.

Furthermore, as a general rule (with a few exceptions), the proposed estate trustee must be resident in Ontario.

Bonding when there is a Will

The issue of bonding arises most often when there is a Will when –

• one or more of the proposed estate trustees is not resident in Ontario, and
• the Will does not expressly dispense with the requirement to post a bond (a common feature of properly drafted Ontario Wills).

Whether to pursue a bond, an Order to dispense with bonding, or some other option depends on the circumstances.

Getting a bond for an Ontario probate application

A surety bond for an estate trustee is a specialized insurance product.  It is available from a select few insurance companies via brokers who handle them often.

It is very unwise to approach ‘just any old broker’ for a surety bond.  Chances are that will result in a long, slow,  frustrating, and expensive process.

An important aspect of bonding is verifying the credit record of the proposed estate trustee.  Credit records for individuals who are not resident in North America are often quite difficult to access and quite different in character from North American credit records.  Accordingly, bonding for a proposed trustee who is not resident in North America is likely to be much more difficult than for one who is resident here.

The alternative to bonding for probate

The alternative to posting a bond is to get a Court order dispensing with the requirement for a bond.  These applications require a properly prepared application to the Court with all the required information.  They are a significant extra step in the probate process and always increase the cost, complexity and delay of probate.  That said, they are readily obtainable in the right circumstances by experienced legal counsel.  We strongly discourage you from trying this on a DIY basis as it is almost certain that your application will be rejected.

A crucial aspect of securing an Order to dispense with a bond in the normal course is securing the consents of ALL beneficiaries of the estate.  Unanimous approval is usually required, asbsent which the Court application becomes even more complex, time-consuming and expensive.

Renunciation may be a viable option

In some cases, it is simplest for the executor who lives outside Ontario to renounce in favour of a trustworthy Ontario-resident applicant.  However, non-residents should not be bullied into renouncing if they are not comfortable with the proposed estate trustee.  An option that should always be considered is using a qualified independent third party professional such as a lawyer or trust company.  We provide this service.

Miltons Estate Lawyers – Probate, Wills, Trusts and Estate