Estate Administration Bond for an Intestate Estate in Ontario

If you are applying to be appointed estate trustee for someone who died without a will, you may be told you need a bond. That can sound alarming, but a bond is a common requirement and there are practical ways to deal with it.

This article explains what the bond is for, when Ontario requires one, who can act as surety, and the exceptions that can save time and cost.

What the bond is and why it is required

The estate trustee is the only person with legal authority to manage or distribute an estate, and the court's certificate gives that authority. How the bond applies to your application depends on your situation, so it is worth confirming with a lawyer.

A bond is required when the deceased died without a will, and also when the applicant is not named as estate trustee.

Once appointed, the estate trustee deals with property that passes to and vests in them as trustee for those entitled. Funeral and burial expenses and debts are paid before the estate is distributed, and the estate trustee is responsible for paying taxes, bills and other debts. How these duties fit together with the bond in your estate depends on the facts, so it is worth confirming with a lawyer.

When a bond is required and how much

A bond is required in these situations:

• The deceased died without a will.
• The applicant is not named as estate trustee.
• The applicant does not live in Ontario, another Canadian province or territory, or a Commonwealth country.

The bond forms are 74L or 74M. The bond is for double the sworn value of the deceased's property, unless a judge orders otherwise.

The court is not obliged to grant administration to the person otherwise entitled. Where necessary or convenient, for example because of insolvency or other special circumstances, it may appoint anyone it thinks fit, on security the court directs. Because the bond is tied to the sworn value of the property, the value you give matters.

Who can be a surety

The surety can be an insurer licensed in Ontario or personal sureties. Two personal sureties are needed for estates over $100,000, and one for estates of $100,000 or less.

A personal surety must be an adult Ontario resident with sufficient assets, and cannot be a lawyer or court registrar. Choose people who understand they are taking on a real responsibility and who are willing to share financial information.

Exceptions that may remove or reduce the bond

The preferential share is the amount a surviving spouse takes first from an intestate estate. Net value means the value of the property after paying the charges on it and the debts, funeral expenses and administration expenses. Because the amount depends on the date of death, confirm which figure applies to your estate.

As of April 1, 2021, a small estate is one valued at $150,000 or less, and it can use the small estate certificate process with application Form 74.1A and draft Small Estate Certificate Form 74.1C.

How to avoid delays

Without a will, the spouse or common-law partner usually has the first right to apply, and a close adult relative can apply after them. The court may appoint the relative it considers most appropriate. Administration may be granted to the spouse, the next of kin, or both.

An applicant files a Consent to Applicant's Appointment as Estate Trustee (Form 74G, Part B). A Renunciation (Form 74G, Part A) is needed from anyone entitled to priority who has not joined the application. If the persons entitled, or a majority of those resident in Ontario, ask for another person to be appointed, the right passes to the person they name, subject to the court's discretion.

Estate Administration Tax is a separate cost from the bond. Nothing is payable on estates of $50,000 or less, and above that the tax is $15 per $1,000 (or part) of the value over $50,000, for certificates requested on or after January 1, 2020. An Estate Information Return is due within 180 calendar days of receiving the certificate. When a beneficiary is under 18, the applicant must serve the Office of the Children's Lawyer.

• Work out the estate's approximate value before you apply, since the bond amount is based on it.
• Ask early whether an exception for a spouse or small estate may fit.
• Line up a licensed insurer or eligible personal sureties before filing.
• Collect the consents and renunciations from everyone with priority.
• Check whether any beneficiary is a minor or incapable, since that affects the small estate exception.
• Ask a lawyer whether a motion to reduce or dispense with the bond makes sense.

Frequently asked questions