Do You Need Probate to Close a Bank Account in Ontario?

When someone dies, their bank account is usually frozen until the bank is satisfied about who has authority to deal with it. Many people ask whether they must go through probate first, and whether there is a balance below which the bank will simply release the money.

This article explains how Ontario treats bank accounts after death, which accounts usually do not need probate, what documents are involved, and what to do if a bank asks for a certificate.

What probate is and why banks ask for it

Probate is the court process that gives someone authority to act as estate trustee, confirms the authority of a trustee named in a will, or approves a will as valid. In Ontario, the document the court issues is called a Certificate of Appointment of Estate Trustee.

Probate is not always required, and the type of assets usually decides whether it is needed. An estate normally must be probated if the deceased owned real property, or assets held by a financial institution, in their own name.

That is why banks commonly ask for the certificate: it proves who is entitled to deal with the money.

Is there a balance below which the bank releases funds?

There is no single dollar figure that we can give you as a rule. What a bank will release without a certificate depends on the bank and its own policies, so ask the bank directly what it requires for the specific account and balance.

Be careful not to confuse a bank's own practice with the court thresholds that apply to the estate as a whole. Those are different things, and they are described below.

Accounts that may be left out of the estate value

Probate is not always required, and the type of assets usually decides whether it is needed. An estate normally must be probated if the deceased owned assets held by a financial institution in their own name. Some accounts are treated differently when the estate value is worked out for the Estate Administration Tax.

• Jointly held assets that pass automatically to the other owner
• Registered plans with a named beneficiary
• Registered plans with no named beneficiary are included

Assets held jointly that automatically become the property of the other owner or owners on death are not included in the estate value for the tax. Registered Pension Plans, RRSPs, RRIFs and TFSAs with a beneficiary designation or beneficiary declaration are not included in the estate value. If there is no such designation, these plans are included.

Joint accounts need care. When a parent puts money in a joint account with an adult child without payment, the law presumes the child holds it in trust for the parent's estate. That presumption can be rebutted by evidence, on a balance of probabilities, that the parent intended the child to have the right of survivorship.

For transfers from a parent to a minor child, the starting point is instead the presumption of advancement, meaning the transfer is presumed to be a gift. How this applies to a particular joint account depends on your situation, so it is worth confirming with a lawyer.

Documents and the court process if probate is needed

If there is a will, the estate trustee named in it usually applies. If there is no will, the married spouse or common-law partner usually has first right to apply, followed by a close adult relative.

The application generally needs the original will and any codicils, proof of death (a death certificate or court order), and court forms, including Form 74A and Form 74C. Applications are usually processed within 15 business days, but this takes longer if documents are missing or a judge must decide an issue.

Estate Administration Tax is paid when the application is filed, and the estate pays it, not the representative personally. No tax applies to the first $50,000 of the estate's value. Above that, the tax is $15 for every $1,000, or part of $1,000.

In some cases a bond is also required, for example when there is no will or the applicant lives outside Ontario, another Canadian province or territory, or a Commonwealth country.

Smaller estates and what to do next

Since April 1, 2021, an estate valued at $150,000 or less can use the simplified Small Estate Certificate process. The application must be sent to beneficiaries or their legal representatives 30 days before filing, and these applications are usually processed within five business days. Estates that exceed the limit must apply for a Certificate of Appointment of Estate Trustee instead.

• Find out which accounts were in the deceased's name alone, which were joint, and which plans had a named beneficiary.
• Ask each bank what documents it requires, in writing if possible.
• Gather the original will, any codicils and the death certificate.
• Work out the estate's total value, as it affects the process and the tax.
• Before distributing anything, get a CRA clearance certificate, because a representative who distributes first is personally liable for any tax debt, up to the value of the assets distributed.
• Speak with a lawyer if ownership of an account is disputed or the paperwork is unclear.

Frequently asked questions