Probate is needed when someone who holds an asset of the deceased will not release or transfer it without a court certificate. In Ontario that certificate is the Certificate of Appointment of Estate Trustee. Whether you need one comes down to a simple question: what did the person own, and in whose name?
This guide walks through the assets that usually require a certificate, the ones that usually do not, and the grey areas in between. For the process itself, see Probate and estate administration.
Assets that usually need a certificate
Real estate in the deceased's name alone
The land registry will not transfer a house, condo or vacant land out of a deceased sole owner's name without a certificate, whether the property is being sold or passed to a beneficiary. This is the single most common reason an Ontario estate needs probate.
Bank and investment accounts in the deceased's name alone
Banks and investment dealers release funds without a certificate only for smaller balances, at their own discretion, and usually after the estate trustee signs an indemnity. Above their internal limit, they require the certificate. The limit is not set by law and differs between institutions.
Shares in private companies and other sole-name investments
A corporation's share register, a transfer agent or a brokerage will generally require proof of the trustee's authority before recording a transfer.
Anything involving a lawsuit or a debt owed to the deceased
To sue, defend or settle on behalf of the estate, the trustee normally needs the certificate to prove standing.
Assets that usually pass outside the estate
- Joint property with a right of survivorship. A home or account held by spouses as joint tenants passes to the survivor on presentation of the death certificate. Property held as tenants in common does not; the deceased's share is part of the estate.
- Registered plans and insurance with a named beneficiary. RRSPs, RRIFs, TFSAs, pensions and life insurance paid to a named person go directly to that person. If the beneficiary is "the estate", or the named person has died, the asset falls back into the estate.
- Assets already held in a trust created during the person's lifetime.
- The Canada Pension Plan death benefit, which is paid on application to the estate or, if there is no estate, to the person who paid the funeral.
A word of caution on joint accounts with adult children. When a parent adds an adult child to an account, Ontario courts presume the child holds the account for the estate unless there is evidence a gift was intended. Joint ownership of this kind does not always avoid probate, and it can create a dispute.
If there is no will
The need for a certificate is decided the same way, by the assets. The difference is that someone has to apply to be appointed as estate trustee under Ontario's intestacy rules, usually a spouse or next of kin, and the court will often require an administration bond before it appoints them. What happens when there is no will.
Small estates
If the total value of the estate is $150,000 or less, Ontario offers a simplified process called a Small Estate Certificate. The forms are shorter and the process is designed so a family member can complete it, though the same rules about notice to beneficiaries and Estate Administration Tax apply.
A simple way to decide
- List every asset and write beside it whose name it was in and whether it had a named beneficiary.
- Cross off everything jointly held with survivorship and everything with a beneficiary other than the estate.
- Look at what is left. If it includes real estate, or accounts above a few tens of thousands of dollars, expect to need a certificate. If it is only personal effects and a modest balance, ask the bank in writing what it will accept.
If step three leaves you unsure, that is the point at which a short conversation with a lawyer saves the most time.
Common questions
Often, yes. A will names the estate trustee but does not prove anything to a bank or the land registry. If the deceased owned real estate alone, or held accounts alone above the institution's limit, a Certificate of Appointment will usually be required whether or not there is a will.
There is no legal threshold. Each bank sets its own limit and applies it at its discretion, usually for smaller balances and only after the estate trustee signs an indemnity. Ask the branch in writing what it requires before assuming a certificate is unnecessary.
Usually not, if it is held as joint tenants with a right of survivorship. The surviving owner registers a survivorship application with the death certificate. If it is held as tenants in common, the deceased's share is part of the estate and normally does need a certificate.
For Ontario estates valued at $150,000 or less, a Small Estate Certificate is available. The forms are shorter and simpler, but the certificate has the same effect for the assets listed on it, and the Estate Administration Tax is calculated the same way.
Sometimes, and sometimes at a real cost. Joint ownership and beneficiary designations can keep assets out of the estate, but they can also trigger capital gains tax, expose the asset to the joint owner's creditors, and cause disputes about whether a true gift was intended. Planning of this kind should be done with advice.