Tag: estates act ontario

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CERTIFICATE OF APPOINTMENT OF ESTATE TRUSTEE RULES KICK IN RIGHT AFTER YOU LOSE SOMEONE CLOSE TO YOU

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

What is a Certificate of Appointment of Estate Trustee?

For anybody that is a potential Estate Trustee, a Certificate of Appointment of Estate Trustee is a required part of the probate procedure. A Certificate of Appointment of Estate Trustee is a document that is issued by the court and provided to the appointed Estate Trustee.

Regular readers of Brandon Blog know that I have written on estate matters before. You also know that in addition to being a licensed insolvency trustee firm, we also act through our related business, Smith Estate Trustee Ontario, acts as a professional estate trustee for both solvent and insolvent deceased estates.

The purpose of this Brandon Blog is to describe the application for probate process in applying for the Certificate of Appointment of Estate Trustee and the responsibilities of the Estate Trustee and how they must perform their duties according to the various rules.

What does a Certificate of Appointment of Estate Trustee do?

The Certificate of Appointment of Estate Trustee verifies that the individual (or a professional Estate Trustee such as Smith Estate Trustee Ontario or a trust company) has in fact been selected to act as the Estate Trustee. It shows that she or he has the legal authority to deal with the real property (real estate) and personal property of the estate. All of the estate assets.

When is a Certificate of Appointment of Estate Trustee needed?

The Certificate of Appointment of Estate Trustee is not a legal requirement in the province of Ontario. It’s merely a record supplied by the government that verifies that the individual called the Estate Trustee has really been designated. It makes things a great deal much easier when validating to financial institutions as well as various other third parties that you have the authority to act concerning the estate property.

To obtain the probate Certificate, you need to complete the appropriate application form to give to the provincial government with a certified duplicate of the death certificate as proof of death in addition to a duplicate copy of the Will. If there is no Will, the court will certainly issue an order upon the probate application of an interested party for approving a selection of Estate Trustee. The estate lawyers can certainly assist with providing legal advice and completing such an application. This would be in addition to any other forms the province needs the Estate Trustee to submit for probate Ontario.

certificate of appointment of estate trustee
certificate of appointment of estate trustee

Avoid Common Errors in Applying for a Certificate of Appointment of Estate Trustee

When applying for a Certificate of Appointment of Estate Trustee, it is always best to get advice from experienced estate lawyers. The Estate Trustee should go to the lawyer for advice on any matters they are unsure about. While most people are concerned about the estate planning process itself, it is equally important to ensure that the application for a Certificate of Appointment of Estate Trustee is completed accurately, completely, and that the appropriate supporting documentation is also provided. If the application is not completed correctly, the executor of the estate is not appointed as the estate trustee, which can delay the estate management and the distribution of the assets.

Applying for a Certificate of Appointment of Estate Trustee is a simple process, but there are many common errors in the application that can result in the application being rejected, delayed, or the application can end up taking more time than it should. Here are some of the most common errors that occur:

  • Section 7 of the Ontario Estates Act requires that the application for a Certificate of Appointment of Estate Trustee needs to be submitted with the Superior Court of Justice in the locality where the departed lived when they died. If the person did not live in Ontario at the time of death, the application needs to be submitted to the Court in the region in Ontario where the deceased had property when they passed away.
  • Be consistent in every document to use the exact same names for individuals and also make sure the spelling matches the names set out in any Will. This includes the dearly departed, estate trustee(s) and estate beneficiaries. If they have any “also known as names”, include those too.
  • All of the following details must be on the court forms, and it must be consistent in all the different forms submitted:
    • date of the Will;
    • day of death;
    • line of work of the dead before they retired;
    • chosen work and addresses of the estate trustee(s).
  • Proper calculation and payment of the estate administration tax payment obligation.
  • Obtaining and also the filing of an estate administration bond in accordance with Section 35 of the Estates Act, or filing motion material for an application to obtain a court order that does away with the bond requirement.

Issues specific to Applications for a Certificate of Appointment of Estate Trustee With a Will

Sometimes, the person applying for the Certificate of Appointment of Estate Trustee (or succeeding estate trustee), is someone different than the person named in the Will. The named person must relinquish his/her right by filing the appropriate form indicating renunciation of the right to a Certificate of Appointment of Estate Trustee (or succeeding estate trustee) with a Will.

If the applicant is not the person identified as Estate Trustee in the Will, that person Will need to be provided with written authority from beneficiaries that, together, have a majority share in the value of the properties of the estate. Otherwise, they Will need a court order giving them the necessary authorization.

The estate beneficiaries indicated in the Will must be served with notice of the application for a Certificate of Appointment of Estate Trustee. If one or more cannot be served, for example, they no longer live at the only known address and they so far can’t be found, then it must be disclosed.

Issues specific to Applications for a Certificate of Appointment of Estate Trustee Without a Will

To be considered to administer the entire estate process when someone dies without a Will, the following applies:

  • You must live in Ontario to make the application.
  • If the departed was divorced at any time, you must make it clear that a prior marriage ended in divorce and what proof you are relying upon to confirm that the departed individual was ended by divorce.
  • On the application for Certificate of Appointment of Estate Trustee, where you describe why you are entitled to apply for the Certificate, you must include information relating to the authorization offered by individuals that are qualified to a share in the distribution of the estate who, together, are entitled to the majority in the value of the possessions of the estate. Absent such authorization, a court order Will be required.
  • The estate beneficiaries indicated in the Will must be served with notice of the application for a Certificate of Appointment of Estate Trustee. If one or more cannot be served, for example, they no longer live at the only known address and they so far can’t be found, then it must be disclosed.

    certificate of appointment of estate trustee
    certificate of appointment of estate trustee

I’ve been named an estate trustee in a Will. What do I have to do now that I have the Certificate of Appointment of Estate Trustee?

An Estate Trustee is an individual that has been appointed to carry out the estate administration duties after a person passes away. But what does that entail? The obligations consist of:

  • seeing to it that funeral arrangements have actually been appropriately made and funeral expenses are paid;
  • amending and filing the amended estate information return, if applicable;
  • calculating and paying the proper amount of estate administration tax;
  • locating and safekeeping crucial files;
  • getting official copies of the death certificate as proof of death;
  • settling any type of financial debts of the deceased person;
  • wrapping up any kind of loose ends like communicating with government departments;
  • dealing with bank officials to collect the funds from and then closing the deceased’s bank accounts;
  • figuring out how to deal with any property;
  • dealing with any estate tax issues and preparing and filing final tax returns;
  • paying the income tax owing; and
  • distributing the net funds on hand or specific property to the beneficiaries as stipulated in the Will.

Is an Estate Trustee responsible for the debts of the estate?

The Estate Trustee’s responsibility does not extend in the first instance for the debts of an estate. As a trustee, it’s your job to ensure the debts are paid and all of the estate’s legal obligations are fulfilled. However, as an Estate Trustee, it’s important to know how to handle the debts of the estate to make sure you aren’t personally responsible for the debts. However, if the Estate Trustee distributes funds without taking care of business, then the Estate Trustee IS responsible for the known debts not paid.

Does an Estate Trustee have to advertise for creditors of the estate?

This is a great question. I’m sure anyone with a passing familiarity with the estate law knows that it may not be required for an Estate Trustee in Ontario to publish a notice to call for creditors of the estate. However, it certainly is a best practice to do before distributing the remaining assets to the beneficiaries of the estate. Traditionally, advertising was done by inserting a notice in a newspaper. More recently, the NoticeConnect online system has been held in Ontario to be an approved way to advertise online only.

certificate of appointment of estate trustee
certificate of appointment of estate trustee

How does an Estate Trustee make a payment from an estate to a child?

If there is a Will, the child is qualified to get his/her share of the estate the way it is laid out in the Will. The Will may establish a trust where payment is made to the child’s parent(s) in trust for the child, or, to a trustee of a trust established for the child.

If there is no Will, then the Estate Trustee is limited to who the funds earmarked for the minor beneficiary can be paid to. There has to be a deferral of payment as an Estate Trustee cannot distribute funds or other types of property to a minor child. It can only be paid to either the Accountant of the Superior Court of Justice or the court-appointed guardian of the property.

The parents of the minor child can apply to the Accountant or guardian for periodic payments to be made for expenses incurred for the benefit of the child. Once the child turns 18 years old, then, they are entitled to their share of the remaining funds.

Certificate of Appointment of Estate Trustee summary

I hope you enjoyed this Certificate of Appointment of Estate Trustee Brandon Blog post. If you are concerned because it is now time to act under the Will, but the named executor is unwilling or incapable of acting, that is where Smith Estate Trustee Ontario can be of assistance. We act as substitute trustees appointed by the court in such situations.

Have you been administering an estate and now you have determined that it is an insolvent estate? Are you worried because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option? Call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

certificate of appointment of estate trustee

 

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Brandon Blog Post

TRUSTEE ACT ONTARIO BY A TORONTO BANKRUPTCY TRUSTEE

Trustee Act Ontario: Introduction

I want to highlight a provincial statute that is also important for the administration of a deceased estate; the Trustee Act, R.S.O. 1990, c. T.23 (Trustee Act Ontario). This blog continues my blog series to show how it would be proper 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.

As always, 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.

My prior estate blogs

In my blog TRUSTEE OF DECEASED ESTATE: WHAT A TORONTO BANKRUPTCY TRUSTEE KNOWS, I looked at some essential matters when it involves a deceased estate and why a LIT would be extremely knowledgable and competent to act as an estate trustee of a deceased estate with those basic requirements.

In the blog, TRUSTEE OF PARENTS ESTATE: DO I REALLY HAVE TO?, I explained why many times parents try doing the proper thing by appointing their children as estate trustees and how many times it just turns out all wrong.

In ESTATES ACT ONTARIO: TORONTO BANKRUPTCY TRUSTEE REVEALS HIDDEN SECRET, I describe how the requirements and provisions of the Estates Act are already very familiar to a bankruptcy trustee. In fact, most of the duties required by the Estates Act are already performed in the insolvency context by a LIT.

My blog ADMINISTRATION OF ESTATES ACT CANADA: EASY FOR TORONTO BANKRUPTCY TRUSTEE TO DO, I explained why a LIT is a right professional to lead the administration of Estates Act Canada.

In this and my next blog, I will focus on two more Ontario statutes that impact the administration of a deceased estate by an estate trustee. The three statutes are:

  1. Trustee Act, R.S.O. 1990, c. T.23; and
  2. Succession Law Reform Act, R.S.O. 1990, c. S.26

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

Things an estate trustee must be aware of

There are various sections of the Trustee Act Ontario that affects the duties and responsibilities of an estate trustee in administering a deceased estate. All the concepts are very familiar to a LIT.

Power of court to appoint new trustees

Section 5(1) of this statute gives the Ontario Superior Court of Justice the authority to make an Order for the appointment of a new trustee. This is the same Court that we attend for Court-appointed receivership and bankruptcy matters. So, a LIT is very familiar with the workings and requirements of this Court.

Who may apply for the appointment of a new trustee, or vesting order

Section 16(1) of this provincial statute says that anyone who has a beneficial interest in the property of the trust can apply for the appointment of a new trustee. This is very similar to how a Court-appointed Receiver is appointed. Although it is normally a secured creditor who makes the application, in theory, it could be any party that has an interest. Section 101(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 states that a receivership Order may be made “…where it seems to a judge of the court to be just or convenient to do so.”. It is the “just and convenient” clause that was relied upon by the judge when we were appointed Receiver and Manager of the assets, properties and undertakings of The Suites at 1 King West condo strata hotel back in August 2007.

For this reason, as a LIT, we are very familiar with this aspect of appointing a trustee.

Power and discretion of trustee for sale

In my blog ADMINISTRATION OF ESTATES ACT CANADA: EASY FOR TORONTO BANKRUPTCY TRUSTEE TO DO, I referred to sections 16 and 17 of the Estates Administration Act. Section 17 in particular, provides the estate trustee with the power to pay off the debts of the deceased. It also allows a trustee to distribute or divide the estate among the beneficiaries.

Section 17 of the provincial Act provides the trustee with the authority to sell, but subject to the requirements of the Estates Administration Act.

A LIT, either in receivership or bankruptcy, is extremely acquainted and experienced in the sale of real and personal property. The LIT likewise makes certain that the creditors are paid in the correct order of priority.

Sales by trustees not impeachable on certain grounds

Section 18(1) deals with a certain aspect of the sale of the property. It states that unless it is proven that there was an inadequate sales price, a sale properly made cannot be impeached by any beneficiary. Any beneficiary wanting to try to impeach a sale must prove that the process used resulted in a sales price at less than fair market value.

Similarly, in a Court-appointed receivership or bankruptcy, the LIT must be able to prove that both the conditions of the sales process and the sales price achieved, was right for the types of assets in the circumstances.

The leading case is the Ontario Court of Appeal decision in Royal Bank of Canada v. Soundair Corp., 1991 CanLII 2727 (ON CA). The process a LIT must follow is known as the “Soundair principles”. This is the test used when deciding whether a receiver or trustee applying for Court approval of a sales process and the authority to sell assets has acted properly. The Court must decide whether the receiver or trustee has:

  • made a sufficient effort to get the best price and has not acted improvidently;
  • considered the interests of all parties;
  • Devised a fair process that has integrity by which offers were obtained; and
  • Introduced any element of unfairness in the working out of the process.

Therefore, I submit, that a LIT is very experienced in devising a sales process and selling assets in a way that is fair to all stakeholders or beneficiaries to attempt to maximize sales proceeds.

Trust funds and investing

Section 26 of the Act deals with the area of the requirement for a trustee to maintain trust accounts and to invest trust property in a way that will maximize the return while not putting the capital at risk to swings in investment pricing, inflation or income tax.

The LIT is very familiar and experienced in trust accounts and the investing of trust funds. Section 25 of the Bankruptcy and Insolvency Act (Canada) (BIA) deals with the requirement of a trustee to establish trust accounts. Also, the Superintendent of Bankruptcy Directive no. 5R5 deals with Estate funds and banking. The Superintendent also monitors the banking of trust funds by all LITs across Canada.

Therefore a LIT is very knowledgeable and experienced in the banking, investing and protection of trust funds.

Security by the person appointed

If letters of administration were granted under the Estates Act, R.S.O. 1990, c. E.21, section 37(2) of the provincial legislation requires every trustee to post security.

I discussed in my blog ESTATES ACT ONTARIO: TORONTO BANKRUPTCY TRUSTEE REVEALS HIDDEN SECRET, the experience of a LIT in the posting of security by way of an insurance company bond.

Actions for torts

Section 38(1) of the provincial statute gives authority to an estate trustee of a deceased person to maintain an action for all torts and injuries to the deceased person or his or her property, except in cases of libel and slander. Any recovery forms part of the deceased’s personal estate. Section 38(3) provides for a limitation on such actions. The action cannot be brought after the expiration of two years from the date of death.

As a LIT, this is a familiar concept to us. When a person or company is insolvent and has a chose in action against one or more parties, such action can be started or continued by a receiver or bankruptcy trustee. In fact, in a bankruptcy, the action actually vests in the trustee.

The receiver or trustee has to make sure that they have a legal opinion on the likelihood of success. The receiver or trustee also has to make sure that they can afford to fund the litigation. The litigation cost cannot reduce the value of the assets under administration. This includes the issue of costs if the action proves unsuccessful.

Distribution of assets under trust deeds for benefit of creditors, or of the assets of the intestate

Section 53(1) of the Act lays out the requirements of a trustee to make a distribution for the general benefit of creditors. As I have described in previous blogs, Section 135 of the BIA deals with the admission and disallowance of proofs of claim and proofs of security.

A LIT is an expert at sorting out creditor claims and could certainly do so under the Trustee Act also.

Trustee Act Ontario: Summary

I hope that this blog reveals to you how the provisions of this provincial statute, detailing the duties of a trustee or estate trustee tracks really close to how a LIT performs 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 a trustee as described in this provincial legislation.

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 Succession Law Reform Act and how a LIT is most familiar with it also.

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

 

trustee act ontario

Categories
Brandon Blog Post

ESTATES ACT ONTARIO: TORONTO BANKRUPTCY TRUSTEE REVEALS HIDDEN SECRET

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:

  1. Estates Act, R.S.O. 1990, c. E.21;
  2. Estates Administration Act, R.S.O. 1990, c. E.22; and
  3. Trustee Act, R.S.O. 1990, c. T.23

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.estates act ontario

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