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)

The choice

There are two separate Rules that can be used for probate of an estate valued at less than $150,000: the regular rule (Rule 74) or the ‘Small Estate Rule’ (Rule 74.1).

As the Small Estate Rule removes some requirements but imposes others, it is advantageous for probate of some but not all estates under $150,000.

Little gain for some

There is likely no significant advantage in using the Small Estate Rule when:

There is no Will and the applicant to be appointed estate trustee is the married spouse of the deceased, or
There is a Will and the applicant is an executor named in the Will and lives in Canada or another Commonwealth country, or
It is ‘reasonably foreseeable’ that additional assets may push the estate over the $150,000 limit, as this would necessitate an entirely new regular estate application.

Substantial possible improvement for some

The Small Estate Rule simplifies probate when:

There is no Will, all beneficiaries are over 18 and not incapable and the applicant is
- the common law (not married) spouse of the deceased, or
- the next-of-kin of the deceased (child, parent, sibling …)
There is a Will, and the applicant is not an executor named in the Will but lives in Canada or other Commonwealth country.

Note that the benefits of the Small Estate Rule evaporate if the applicant is the common law spouse of the deceased and the beneficiaries of the estate are the deceased’s children under 18 (even if they are also the children of the common law spouse).

Key Differences

Pro: fewer renunciations and consents: The key differences between the probate process using the two different Rules is whether or not signed ‘consents’ of beneficiaries and signed ‘renunciations’ of other potential estate trustees must be filed.

Con: more detail upfront, narrower powers: In order to probate using the Small Estate Rule you must detail each asset when your file the probate application. This detail is not required under the regular Rule. Also, a Small Estate trustee can only deal with the assets identified at probate, whereas a regular trustee can deal with all assets whenever they are found. This makes it much more cumbersome to deal with new assets uncovered later when probate was under the Small Estates Rule than under the Regular Estate Rule.

Renunciations & Consents – Small and Regular Estates.

A signed Renunciation (Form 74G) of the right to act as estate trustee can be required when –

An executor named in a Will chooses not to act, or
One or more people of kinship to the deceased equal or greater to the kinship of the applicant are not applying.

We recommend that you secure signed Renunciations using Form 74G whenever possible, even when probating using the Small Estate Rule.

A signed Consent (also Form 74G) is required from beneficiaries entitled to inherit at least 50% of an estate when there is no Will or when the applicant is not an executor named in a Will.

A signed Consent is required from each and every beneficiary if the applicant is asking for a Court Order dispensing with the requirement to post a bond.

In theory, these documents are rarely required when using the Small Estate Rule. However, many Courts are still requesting them. Accordingly, we recommend that applicants try to secure signed Renunciations and Consents whenever possible.

Affidavit of debts

If the applicant for probate of a small estate is the married spouse of the deceased they must file an ‘Affidavit of Debts’ of the deceased.

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