Estate Administration Bond in Ontario When There Is No Will

You have applied, or are about to apply, to be estate trustee of someone who died without a will in Ontario, and you have been told you need a bond. That can sound like a large and confusing cost, especially while you are also grieving and sorting out the family's affairs.

A bond is a form of security for the estate. This article explains why it is required on an intestacy, how its size is set, who can act as surety, and the three ways it may be avoided or reduced. Your own situation may turn on details, so it is worth confirming with a lawyer before you file.

Why a bond is required when there is no will

When someone dies without a will, nobody was chosen by the deceased to manage the estate. A bond is a promise, backed by a surety, that the person appointed will manage the estate properly. It protects the people entitled to the estate if something goes wrong.

In Ontario, a bond is required when the deceased died without a will, when the applicant is not named as estate trustee, or when the applicant does not live in Ontario, another Canadian province or territory, or a Commonwealth country. On an intestacy, the first of those applies automatically. The bond forms are 74L or 74M.

How big the bond is

The bond is for double the sworn value of the deceased's property, unless a judge orders otherwise. So an estate sworn at a given value needs a bond for twice that figure. What it costs you to arrange the bond depends on your situation, so it is worth confirming with a lawyer.

The value is sworn, so it needs to be worked out carefully before you file. Gather information on bank accounts, real estate, investments and other assets, and speak with a lawyer if the value is uncertain.

Who can act as surety

The surety can be an insurer licensed in Ontario or personal sureties. The number of personal sureties depends on the size of the estate.

A personal surety must be an adult Ontario resident with sufficient assets, and cannot be a lawyer or court registrar. If you cannot find suitable people, a licensed insurer is the other route.

Three ways to avoid or reduce the bond

• Surviving spouse: no bond is required if the estate's net value does not exceed the preferential share and an affidavit setting out the estate's debts is filed.
• Small estate: no bond is required for a small estate unless a beneficiary is a minor or is incapable under section 6 of the Substitute Decisions Act, 1992.
• Court order: a judge may reduce or dispense with the bond in special circumstances, on a motion supported by a Notice of Motion, an affidavit and a draft order.

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

The spouse exception and net value

The bond exception for a surviving spouse applies where the estate's net value does not exceed the preferential share. For the preferential share, net value means the value of the property after paying the charges on it and the debts, funeral expenses and administration expenses. How net value is measured for the bond exception itself depends on the facts of the estate, so it is worth confirming with a lawyer.

The preferential share is $350,000 for the estates of people who die on or after March 1, 2021. For deaths before March 1, 2021, it is $200,000. Check the date of death before relying on a figure.

The exception is for a surviving spouse. For these intestacy rules, spouses are people who are married to each other. A common-law partner does not inherit under the Succession Law Reform Act when there is no will, so this exception may not fit that situation, and advice is worthwhile. Whether the exception fits your situation depends on the facts, so it is worth confirming with a lawyer.

What to do next

• Confirm the date of death, and whether there is truly no will.
• List the estate's assets and debts to estimate the gross and net value.
• Check whether you are a surviving spouse, or whether the estate is $150,000 or less.
• If a beneficiary is a minor or incapable, expect that the small estate exception may not apply.
• If you need a surety, decide between a licensed insurer and personal sureties who meet the rules.
• If your case is unusual, ask a lawyer whether a motion to reduce or dispense with the bond makes sense.

Having a clear picture of the estate's value and who is entitled to it makes the application smoother, and a lawyer can confirm which route fits your facts.

Frequently asked questions