Applying for a Certificate of Appointment of Estate Trustee can sometimes feel like a bit like a spy thriller. The process can be full of twists and unexpected surprises that can frustrate The Living Daylights out of an applicant.
When an Administration Bond is Needed
One difficulty that can arise is the requirement that an applicant obtain an administration bond. Unless the Court orders otherwise, a bond will generally be required when:
- The deceased died with (Dr.) No will;
- There is a will, but the applicant is someone other than the named executor;
- The applicant is applying to be a succeeding estate trustee; or
- The applicant is not a resident of Ontario or another Commonwealth jurisdiction (eg. From Russia… With Love).
There is an exception where there is no will, the applicant is the surviving spouse of the deceased, and the net value of the estate is less than the spouse’s preferential share.
Amount of the Administration Bond
Subsection 37(1) of the Estates Act requires that a bond be in an amount that is double the amount of the property under administration, which property can include Money(penny), Gold(finger), and Diamonds (are Forever). This can be prohibitively costly for a person seeking to be appointed as Estate Trustee.
Dispensing with an Administration Bond
The Spectre of paying for a bond would make many potential applicants feel that The World is Not Enough to encourage them to apply. Fortunately, applicants can find a Quantum of Solace in subsection 37(2) of the Estates Act, which allows the Court to reduce the amount of a bond or dispense with it altogether.
The Court will grant an Order dispensing with an administration bond where all of the beneficiaries are of age, mentally capable, and provide their consent to it and where the debts have all been paid or where the creditors are otherwise protected. An affidavit must be filed which includes the necessary information.
In Re Henderson, the Honourable Justice D.M. Brown (as he then was – he is now a Justice of the Court of Appeal for Ontario) sets out the requirements for what must be included in the affidavit:
- The identity of all beneficiaries of the estate;
- The identity of any beneficiary of the estate who is a minor or incapable person;
- The value of the interest of any minor or incapable beneficiary in the estate;
- Executed consents from all beneficiaries who are sui juris to the appointment of the applicant as estate trustee and to an order dispensing with an administration bond should be attached as exhibits to the affidavit. If consents cannot be obtained from all the beneficiaries, the applicant must explain how he or she intends to protect the interests of those beneficiaries by way of posting security or otherwise;
- The last occupation of the deceased (even if he or she was On Her Majesty’s Secret Service);
- Evidence as to whether all the debts of the deceased have been paid, including any obligations (to the Spy Who Loved him or her) under support agreements or orders;
- Evidence as to whether the deceased operated a business at the time of death and, if the deceased did, whether any debts of that business have been or may be claimed against the estate, and a description of each debt and its amount;
- If all the debts of the estate have not been paid, evidence of the value of the assets of the estate, the particulars of each debt – amount and name of creditor – and an explanation of what arrangements have been made with those creditors to pay their debts and what security the applicant proposes to put in place in order to protect those creditors.
Hopefully, upon filing of an affidavit that satisfies all of the above concerns, the Court will exercise its License to Kill the need to obtain a bond.
Please feel free to contact us at 416-591-9997 or online if you have any Q’s about dealing with issues relating to administration bonds or other probate issues (or if we missed any opportunities for puns… I just couldn’t make Thunderball work).