On Jan 1, 2022, O. Reg. 709/21 came into effect. The regulation addresses the significant changes made to the Succession Law Reform Act R.S.O. 1990, c. S.26, and, through the introduction of new streamlined court forms, also endeavours to simplify and improve the probate process in Ontario. The official announcement on Ontario's Regulatory Registry touts the elimination of 43 forms, the introduction of eight new forms, and the amendment of some 15 other forms.
One of the most significant changes to the process for applying for a Certificate of Appointment of Estate Trustee (CAET) relates to the notice requirement. Prior to Jan. 1, 2022, an applicant for a CAET with or without a will was required to serve Form 74.7 (with a will) or Form 74.17 (without a will) on all persons and organizations having a financial interest in the estate. Both forms disclosed the applicant's intention to apply for a CAET and included the names of each person and organization entitled to a share in the estate. Form 74.7 also required the enclosure of an excerpt from the deceased's will for legatees, or the entirety of the will for residual beneficiaries. No information with respect to the value of estate assets was required to be disclosed to any beneficiary at the probate application stage.
O. Reg. 709/21 alters these requirements. Under the regulation, all beneficiaries under the will or all beneficiaries at law (if the deceased died without a will) must be served with new Form 74A. This new form requires the disclosure of the value of the estate assets on which the estate administration tax is calculated (i.e. assets passing under the will which is submitted for probate). For the typical beneficiary unfamiliar with the complexities of estate administration, the reported value may be misleading, as it does not include deductions for the deceased's unsecured liabilities, tax on deemed disposition immediately before death, and other estate expenses that must be taken into account before beneficiary distributions can be calculated. As such, the estate value reported on Form 74A has the potential to create great expectations for beneficiaries who may very well end up receiving a drastically smaller share of the net value of the estate than originally anticipated.
Estate administration transparency is one of the primary sources of conflict between estate trustees and beneficiaries, and, in that respect, the enhanced transparency provided by the disclosure of information early in the probate process is commendable. However, Form 74A does not provide any context with respect to the reported net value of an estate, and so has the potential to create unintended conflict. Estate trustees, and their legal advisors, may be well advised to provide that additional context when serving Form 74A on beneficiaries so as to avoid creating unreasonable and "Great Expectations".
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