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Just When You Thought You Were Safe….More Changes to Estate-Related Legislation

A newspaper on a wooden desk - Changes coming in 2021

As most estate practitioners are aware, significant changes to the Succession Law Reform Act (“SLRA”) are coming into force on January 1st, 2022[1]. As a result of the changes to the SLRA, the applicable rules and forms used in the process of applying for a Certificate of Appointment of Estate Trustee (also known as applying for probate) are to be amended.

On October 14th, 2021, O. Reg. 709/21 made important changes to the Rules of Civil Procedure regarding court rules and forms in probate applications[2]. The rules and forms are being amended to reflect questions that must be added or updated to address the SLRA amendments. However, in addition to modifying existing forms, the Ministry of the Attorney General has also attempted to simplify the probate application process by reducing the number of forms, making them fillable and attempting to simplify the requirements.

Generally

The regulation primarily serves to amend Rule 74 and forms under that rule, but it also makes ancillary changes to other rules to reflect the estate amendments and reference the new estate forms.

Eight new court forms are created, while fifteen remaining forms see various administrative amendments. All of these forms will receive new alphanumeric numbering, allowing for easier identification of the forms, with the most commonly used forms designated 74A to 74H.

The new forms are intended to have a simplified format and clearer guiding language to assist in completion.  For example, comprehensive instructions are provided in the application form (74A) as to service of the application on beneficiaries and other parties and filing with the court. As well, a number of forms have more fulsome explanatory language for beneficiaries who receive notice of the application, with information as to the options available to the beneficiary, including how a beneficiary may object to an appointment.

Application for Certificate of Appointment

New rule 74.04 creates one set of requirements for original applications for a Certificate of Appointment, whether with a Will or without a Will, and whether limited to specific assets, or all assets of the estate. The requirements in current rule 74.04 (applications with a will), and current rule 74.05 (applications without a will) are combined under new rule 74.04.

Applicants for a Certificate of Appointment of Estate Trustee, with or without a Will, will need to complete application form 74A (the “Application Form”)[3]. The Application Form includes various questions with respect to the deceased’s marital status, including details about any separation or breakdown of the deceased’s marriage, information with respect to common law relationships, as well as reference to the repeal of provisions in the SLRA relating to revocation of a Will by marriage.

Unfortunately, although the Application Form is intended to be easier to complete, answering the questions on the form will not necessarily be straightforward. Where details are required to be provided, the applicant (or acting lawyer) must determine what details are relevant, based on the amendments to the SLRA. For example, in question 3 of Part 3, the form states “explain why the will was not revoked by marriage…”.  For an individual who is unfamiliar with the legislative changes, it is possible that the information submitted will either be irrelevant or inadequate, and the application will be rejected.

As another example of the potential complex nature of the responses required, the Application Form requires the applicant (or lawyer) to determine, at the time of the application, if the deceased was separated from his or her spouse as of the date of death, per the definitions in ss. 17 and 43.1 of the SLRA. Separation is a complicated concept and involves not only an understanding of the general and transitional provisions of the SLRA, but also of case law that has evolved over time. It is uncertain whether the details that are to be provided will be reviewed by court staff or by a judge, to determine whether a separation actually occurred.

Applicants will also need to set out why they are entitled to apply for a certificate of appointment, and identify if consents or renunciations are required. This section in the Application Form contains various checkboxes, but provides little guidance with respect to which boxes should or must be checked off. Completing that section will require a basic understanding of legislation applicable to a person’s entitlement to apply for probate.

Notice to beneficiaries

The Application Form itself will be served on all beneficiaries of the estate, rather than just the old Notice form. As a result, beneficiaries will receive comprehensive information about the value of the estate, the marital status and history of the deceased, as well as information about all of the other beneficiaries. This will provide much needed transparency to beneficiaries very early in the probate process.

While transparency will be of benefit in most estates, there are potential issues that could arise. A beneficiary may disagree with or not understand a statement in the Application Form, and assume that this forms the basis of an objection to the appointment. For example, a beneficiary might question the value of the estate as indicated on the form and file a Notice of Objection. Estate value is, in fact, an accounting issue that is normally addressed in other ways during the course of administration of an estate. It is not generally a basis to prevent the appointment of a person entitled to act as estate trustee.  However, upon the filing of an objection, the appointment of the estate trustee would be stayed and would not proceed until the objection is withdrawn or a court order is issued.

Lastly, because the Application Form only includes the value of assets, it does not provide an accurate picture of the financial status of the estate.  A beneficiary receiving a copy of the application may not understand that debts and liabilities, including income taxes, must be paid in priority to any distribution. It is possible that a beneficiary may rely on these figures in a calculation of his or her entitlement, and then take issue when the distribution actually occurs.

Certificate of Appointment

One version of a Certificate of Appointment (Form 74C) will be issued for all variations on the appointment, including original appointments with or without a will, whether limited to specific assets or for the entire estate, estate trustees appointed by nomination of foreign estate trustee, appointments of succeeding estate trustees, appointments of an estate trustee during litigation, and other appointments under court order. The applicant (or lawyer acting) must identify on the draft certificate the nature of the appointment and delete clauses that are not applicable. If this is not completed correctly, it is possible that the application will be rejected.

Conclusion

Once in effect on January 1st, 2021, the changes to the rules and forms will be immediate. With the exception of affidavits of execution of a Will, the old estate forms will not be accepted after December 31st, 2021. Applicants, and their lawyers, will be expected to apply the new rules and use the new forms for all applications filed on or after that date. The lack of a transitional period will create a steep learning curve for lawyers submitting applications, as well as court staff who process applications.

The forms themselves are not straightforward and require at least a basic understanding of legislation and case law.  Over time and with proper professional development, lawyers will become familiar with the new forms, however it is likely that many applications will be rejected in the first 6 to 12 months of the rules and forms coming into force. This will result in a further backlog of the issuance of certificates of appointment.


[1] Please note that this blog does not address rules and forms applicable to small estates, as defined by the Estates Act.  These rules and forms were put into place earlier in 2021 and remain in force under rule 74.1.

[2] For more information, see the government’s summary at https://www.ontariocanada.com/registry/view.do?postingId=39310&language=en, and the regulation itself at https://www.ontario.ca/laws/regulation/r21709?search=O.+Reg.+709%2F21.

[3] Certain other appointments, such as an appointment of succeeding estate trustee, ancillary appointment, resealing, or appointment of an estate trustee during litigation, will require Form 74J to be used.

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Mark Hallink