Administrator Archives - Ira SmithTrustee & Receiver Inc.

Estates Act Ontario: Introduction

I am continuing my series of blogs to show how it would be very natural to appoint a licensed insolvency trustee (LIT or bankruptcy trustee) (formerly known as a bankruptcy trustee) as the estate trustee (formerly called an executor or executrix) of a solvent deceased estate under the Estates Act Ontario. In this blog, I am going to focus on that piece of provincial legislation that guides the activities of an estate trustee.

In my blog TRUSTEE OF DECEASED ESTATE: WHAT A TORONTO BANKRUPTCY TRUSTEE KNOWS, I set the stage by going over some basics when it comes to a deceased estate and why a LIT would be very comfortable with those basic requirements for an administration of a deceased estate. In the blog, TRUSTEE OF PARENTS ESTATE: DO I REALLY HAVE TO?, I described why in some cases parents trying to do the right thing by making all their children an estate trustee could turn out very wrong.

In this and the next two blogs, I want to focus on the three main Ontario statutes that govern the conduct, duties and responsibilities of an estate trustee of a deceased estate. The three statutes that I will talk about are:

As you have probably guessed by now, in this blog, I will show how a bankruptcy trustee would be very familiar with the workings of the Estates Act.

Since we are not lawyers, and I am by no means providing in this and upcoming Brandon’s Blogs advice on wills or estate planning matters. For that, you must consult your lawyer.

Provisions a LIT is familiar with

Jurisdiction

Section 5 of the Estates Act Ontario states that letters of administration shall not be granted to a person not residing in Ontario. Similarly, a bankruptcy trustee must be licensed by the Superintendent of Bankruptcy in each province the LIT wishes to practice in.

Posting of security

Section 14(2) of the Estates Act Ontario requires that the administrator appointed to administer a deceased estate may be required to post security as the court might require.

Section 5(3)(c) of the Bankruptcy and Insolvency Act (Canada) (BIA) states that the Superintendent of Bankruptcy can:

“…require the deposit of one or more continuing guaranty bonds or continuing suretyships as security for the due accounting of all property received by trustees and for the due and faithful performance by them of their duties in the administration of estates to which they are appointed, in any amount that the Superintendent may determine…”

The posting of security is another common area that a LIT understands well.

Court can appoint

Section 29 of the Estates Act Ontario deals with the appointment of an estate trustee. This section gives the Ontario Superior Court of Justice the authority to appoint an estate trustee where:

a person dies intestate;
the estate trustee named in the will refuses to prove the will;
where the named estate trustee(s) ask another person be appointed to administer the deceased’s estate; or
where there are special circumstances.

Section 243(1) of the BIA gives the Court the power to appoint a receiver. So, assessing the appropriateness of acting as a Court officer and providing consent to do so is something a LIT is quite familiar with.

Accounts to be rendered

Section 39 of the Estates Act Ontario requires the estate trustee to “…render a just and full account…” of the estate trustee’s activities. The LIT is fully familiar with this process. In both a Court-appointed receivership and a bankruptcy administration, the LIT must submit full and detailed accounts showing its activities, fees and disbursements for approval by the Court. This approval process is called taxation. This is another common area between the duties of an estate trustee administering a solvent deceased’s estate and the duties of a LIT.

Admitting and disallowing claims

Sections 44 and 45 of the Estates Act Ontario deals with the rules to be followed in contesting claims made against the deceased’s estate. The LIT is very familiar with this process. Section 135 of the BIA deals with the admission and disallowance of proofs of claim and proofs of security.

The LIT is a perfect party to be able to decipher claims made against a deceased’s estate and follow the provincial statute in the allowance and disallowance of claims.

Disputes as to ownership

Section 46 of the Estates Act Ontario describes the process for handling the claim by any third party to ownership of personal property in the estate not exceeding $800 in value. There are steps in the BIA that a LIT must follow when faced with claims of ownership of property by a third party in the possession of the bankrupt. So resolving such disputes is very familiar to the LIT.

Summary

I hope that in this blog I have successfully made the case that the provisions of the Estates Act Ontario outlining the responsibilities of an estate trustee tracks very closely what a LIT does in either a Court-appointed receivership or bankruptcy administration.

Therefore, the LIT is used to acting as a Court officer and could very easily perform the requirements and duties of an estate trustee as described in the Estates Act Ontario.

If you have any questions about a deceased estate and the need for an estate trustee, whether it is solvent or insolvent, contact the Ira Smith Team. We have decades and generations of experience in helping people and companies overcome their financial problems. You don’t need to suffer; we can end your pain.

In my next blog, I am going to write a similar comparison. It will be about the requirements outlined in the Estates Administration Act and how a LIT is most familiar with them also.

In the meantime, if you have any questions at all, contact the Ira Smith Team.

A Consumer Proposal is THE great alternative to bankruptcy. From the files of Ira Smith Trustee & Receiver Inc.: Sammy (not his real name), a 31-year old with no dependents, is the family member of a professional that refers work to us. Referrals are always the highest form of compliment because it demonstrates confidence and respect for our professional abilities, and the strength of our personal relationship. Unfortunately Sammy had fallen prey to the world of online gambling and really needed our help.

Sammy was gambling daily and he was using his credit cards to place his online debts. And, as is the case with compulsive gamblers, Sammy was losing and losing big until he had no more credit to gamble with. He couldn’t afford to make more than the minimum monthly payments on his credit cards and he came to the realization that he would never be able to repay his debts.

The Solution: Sammy agreed to perform a Consumer Proposal paying approximately 1/3 of what he owed over a 5 year period and his creditors agreed to the Consumer Proposal.

What is a Consumer Proposal? A Consumer Proposal is an alternative to bankruptcy, governed by the Bankruptcy and Insolvency Act (BIA). It’s available only to individuals whose total debts do not exceed $250,000, not including debts secured by their principal residence. Working with a trustee in bankruptcy you make a consumer proposal to:

Pay your creditors a percentage of what you owe them over a specific period of time
Extend the time you have to pay off the debt
Or a combination of both

Payments are made through the trustee, who is called the consumer proposal Administrator under the BIA, and the trustee uses that money to pay each of your creditors. The consumer proposal must be paid off within five years.

Additional help and support: We recognized that Sammy had to deal with his gambling addition in order to get out of trouble and stay out of trouble so we insisted that in order for us to support his Consumer Proposal he would have to attend Gamblers Anonymous meetings. Sammy attended Gamblers Anonymous meetings faithfully, stopped gambling, and was able to save enough from his work earnings to pay off his Consumer Proposal 1.5 years ahead of schedule. After completing his Consumer Proposal, Sammy obtained at least one promotion at work, is earning more money, continues to save and was able to purchase a condominium apartment for himself (and qualify for mortgage financing).

You can turn your life around with the will and the right professional help. If you’re experiencing serious financial problems, regardless of the cause, contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now you can leave the past behind and work towards a bright future.

As the miracle of Chanukah has been celebrated this past week, and as the miracle of Christmas will be celebrated in two days, I hope that this inspirational story of Sammy, last week’s inspirational story of how Molly turned her life around from addiction and debts to health and happiness in Personal Bankruptcy Can Be A Great Beginning and the first inspirational corporate turnaround story from two weeks ago, Restructuring and Turnaround of Corporations Saves Jobs & Companies, provides you with a glimpse of how modern day miracles can occur. I wish all of our readers Happy Chanukah, a very Merry Christmas, and a healthy, happy, prosperous New Year where we will all write and tell our own inspirational stories.