Ontario’s estate laws are changing April 1. This comes in an effort to speed up the time it takes to process small estates of deceased individuals.
The move by the Government of Ontario means small estates are those worth up to $150,000. This is an increase from the existing $50,000 threshold currently in place. It’s good news for not only immediate benefactors, but for everyone potentially involved in an estate’s execution.
“The speedy execution of an estate has a number of positive benefits,” says Darren Devine, Sun Life Financial advisor and President of Devine and Associates Financial Services Inc.
Raising the small estate limit to $150,000 means more estates will be eligible for a simplified probate process.
Probate is the procedure to ask the Court to give a person authority to act as the estate trustee or confirm the authority of a person named as the estate trustee in the deceased's will. Probate also involves formally approving that the deceased's will is their valid last will. When money is passing along to others, the estate must go through probate – with or without a will.
Devine says speeding up the process of an estate’s execution can be positive. This is especially true when dealing with portfolios that contain fluctuating equity-based assets.
“Estates often have assets that can vary in value from day to day,” he says. “The sooner you can execute the completion the better it is for the beneficiaries. If markets trickle upward, the estate could argue that money was left on the table. However, the idea is to maximize assets as soon as possible to avoid downward fluctuations in values.”
Eliminating the red tape involved in estate execution means beneficiaries can get funds faster. That could be critical in times of market volatility. Devine says executors still need to follow the responsibilities of administering an estate. This includes things like obtaining a death certificate, locating assets and paying any associated debts prior to distributing them. However, he sees the new increased limits as a good thing.
“Probate is a process everyone has to go through. The government is just making it easier for Ontarians to complete tasks. Speed is of the essence when dealing with volatile assets that are going to the next generation.”
This article is intended to provide general information only. Sun Life Assurance Company of Canada (Sun Life) and Devine and Associates do not provide legal, accounting or taxation advice to Clients. Before acting on any of the information contained in this article, make sure you seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.