Ontario consults on estate law reform

Ontario is considering raising the dollar value for small estates, enshrining emergency measures related to virtual document signing and repealing the section of the law that revokes a will upon marriage.

On Aug. 5, Attorney General Doug Downey sent a letter “to legal stakeholders and lawyers who practice estates law to seek feedback on ways to advance estates law in Ontario,” said a Ministry of the Attorney General spokesperson in response to questions from Advisor’s Edge.

The letter specifically requested “written input on the appropriate defined value of ‘small estate’ to be set out in regulation,” as well as responses to a list of seven questions related to estate law reform.

Small estates in Ontario are those valued up to $50,000 “so as to exclude most real estate property transactions,” the letter said. As of Jan. 1, the Ministry of Finance provides a tax exemption for estates valued under $50,000.

The consultation letter asked stakeholders whether the $50,000 limit is still appropriate for small estates and whether there would be procedural difficulties if the tax exemption value and the small estates value did not align.

The seven questions cover issues such as when the emergency order allowing wills and powers of attorney to be signed virtually should be lifted, or whether such provisions should be made permanent; whether to repeal the section of law that revokes a will upon marriage; and whether courts should be granted more latitude in validating or rectifying an improper will.

In addition to sending the letter, the attorney general participated in a town hall meeting on Aug. 6 hosted by the Ontario Bar Association “to draw more input into the consultation,” the spokesperson said.

STEP Canada, one of the consulted stakeholders, published its responses to the letter.

Regarding the dollar limit for small estates, “the general consensus is that it is preferable, but not required, that the amounts align should a small estates process be implemented,” the STEP response noted. “What is most important is that there is a certificate of some sort upon which a third party can rely, similar to the Certificate of Appointment of Estate Trustee.”

Regarding virtual will signing, STEP members agreed that the emergency order should remain until it is safe for “high-risk individuals to meet in person.”

However, members did not agree on whether the order should be made permanent, citing the potential for financial abuse. Members also raised the concern that “documents witnessed through video will be much more open to challenge.”

Nor did STEP members agree whether to repeal the section of law that revokes a will upon marriage. Some members pointed out that the law already allows the spouse to elect to retain the will.

However, members also said that automatic revocation could allow predators to take advantage of people with diminished capacity — marrying them, automatically revoking their prior will, and then inheriting when the intestate spouse dies.

STEP members, however, generally agreed that Ontario should grant courts greater latitude in validating wills.

Consultation submissions were due Aug. 23. The ministry is now reviewing the responses, the spokesperson said.

This estate law consultation follows the government’s long-overdue initiative to modernize Ontario’s capital markets as well as an ongoing push to reduce regulation in general.

Rudy Mezzetta

Rudy is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on tax, estate planning, industry news and more since 2005. Reach him at rudy@newcom.ca.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.