Selling Estate Assets Before Probate Is Granted in Ontario

Houses sit empty, cars lose value and carrying costs keep running. It is understandable that an executor wants to sell something quickly rather than wait for the court. The question is whether you have the authority to do so, and what could go wrong if you act too soon.

This article explains the general position in Ontario for estate assets such as a house or a vehicle. Every estate is different, so treat it as a map of the issues, not a green light.

What authority exists before the certificate

Under the Estates Administration Act, the deceased's property vests in the personal representative, who holds it as trustee for the people entitled, subject to the payment of debts. That is a starting point, but it does not mean every sale is simple or safe.

Whether you need a certificate at all depends on the asset. Ontario guidance says that if the deceased owned real property or assets held by a financial institution, the estate normally has to be probated. It also says probate is not always required: assets held jointly or with a designated beneficiary pass according to how they are owned or designated.

For something like a vehicle, what a buyer or a government office will accept before a certificate issues can vary, so confirm the requirements for that specific asset before you promise a sale.

Selling a house before probate

Land is where the rules bite hardest. The Land Titles Act generally requires the estate trustee to obtain a certificate of appointment before dealing with land after an owner dies. A buyer's lawyer will usually look for it.

There is a narrow exception. Where there is a will, the certificate may be waived if the property was converted by the Ministry from the Registry system to Land Titles and this is the first dealing since conversion. The affidavit must set out the estate's value and state that the will is the last will and that no certificate was applied for, and a covenant to indemnify the Land Titles Assurance Fund is still required. Most sales will not fit this exception.

Listing a property and negotiating an offer is one thing. Closing is another. Timing the closing around when a certificate can realistically be issued is often the practical answer. Applications are typically processed within 15 business days, though the registrar may ask for more information or refer an application that raises issues to a judge.

Beneficiary approval and special cases

If real property is being sold only for distribution, the sale is not valid without the beneficiaries' concurrence, or approval from the Children's Lawyer or the Public Guardian and Trustee. A sale involving a minor's interest needs the Children's Lawyer's written approval or a judge's order.

Where there is no will, an estate cannot be distributed on an intestacy until one year after the death. And if a surviving spouse is involved, no distribution may be made within six months of the death unless the spouse consents in writing or the court authorizes it.

Also keep in mind that real property the personal representative has not dealt with within three years of death vests in the beneficiaries without a conveyance, unless a caution is registered in the prescribed form.

Risks of acting too soon

• A buyer may refuse to close without the proper authority, leaving you exposed to a failed deal.
• Debts come first: the estate is distributed only after funeral and burial expenses and debts are paid. If assets cannot cover all debts, they are paid proportionately.
• Paying out sale proceeds too early can create personal exposure, because a personal representative who has given the required notices to creditors is protected only against claims they had no notice of at the time.
• Selling without beneficiary agreement can invite a dispute, and any interested person may move for directions.
• If the will is later challenged or another person is entitled to act, a quick sale can become hard to defend.

What to do next

• Find the will and confirm you are the named estate trustee, or the right person to apply.
• List each asset and note whether it passes by ownership or designation, or through the estate.
• Secure and insure the property while you wait.
• Speak with the beneficiaries before listing, and get any approvals in writing.
• Ask a lawyer whether to apply for the certificate first and how to time any sale.

Frequently asked questions