Heir Rights (ON)
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As an heir, you likely have questions about the Canadian inheritance process, and your rights in ON.
Overall, if you are entitled to receive an inheritance, you have the right to expect to receive that inheritance ... eventually. While some provinces attempt to put deadlines on estate settlements, an average Canadian estate takes 6-18 months to settle, and some take years (see Inheritance Timing).
Rights Under Probate
Most estates are settled by an executor appointed by the court (often a family member), under a court-supervised process known as probate. The executor has significant discretionary power, but he or she has a fiduciary duty to act in the best interests of the estate, to follow the law, and to distribute estate proceeds to the rightful heirs.
However, ON estates must satisfy obligations according to priority (for example, debts take precedence over distributions), so in some cases your inheritance will be less than expected, or even be completely consumed by other estate priorities (which must generally affect all potential heirs proportionately). See Estate Expenses, Fees, and Taxes for more information, and note that for your protection, estate executors must document all estate transactions and make these records available to the courts ... and in some provinces, must proactively deliver these records in a Final Accounting to the heirs as well.
Your rights as an heir to a Canadian estate include:
- Notice: Many provinces have laws that require an estate executor to notify you of the death and the estate proceeding if you are mentioned in the will, if there is no will and you are entitled to inherit by intestate succession, or even if there is a will that doesn't mention you, but you would have been entitled to inherit by intestate succession (i.e., you are an "heir-at-law").
- Estate Information: Many provinces require the executor to provide you a copy of the estate inventory, as well as a Final Accounting (what happened to the inventory, what estate expenses were incurred, etc.). If the estate is undergoing probate, and the province does not require that the executor directly supply you the information, you can simply make a public records request for the reports filed with the court.
- ON Family Entitlements: If you are a surviving spouse or dependent child, you likely have additional rights that go beyond anything mentioned in the will or mandated by the laws of intestate succession. Surviving family members often have the right to remain living in the family home for a certain period of time, to automatically receive certain personal possessions, to receive a living allowance from the estate while it is being settled, and to receive certain minimum amounts (see ON Family Entitlement details for your province).
- Reasonable Timeframe: Unless the asset is one that automatically transfers on death (such as an RRSP with a named beneficiary), you can expect the process to take 6-18 months on average, and sometimes considerably longer (see Inheritance Timing). An executor has a duty to settle an estate in a reasonable timeframe, but most provinces are very lenient about such timeframes, and there are legitimate reasons that some estates take years to settle. On the other hand, some executor simply cannot handle the task, or unreasonably delay, and those can be grounds to ask the court to remove the executor and appoint someone else.
- Court Objections: If the estate undergoes probate (and most do), you have the right to object to the probate court about anything you think is being done incorrectly or improperly. You can object to the appointment of a particular executor, you can object to the validity of a will, you can object to particular distributions (not just your own), you can object to sales of assets, you can object to how long things are taking ... in fact, you can object to almost anything. You just need to make sure you have valid grounds for doing so, and it's important to realize that settling an estate is a difficult task that takes time. See Court to find your particular court.
- Lawsuits: If the probate judge does not respond to your objection as desired, or if there is no probate proceeding, then you can file a civil lawsuit against the estate. Such lawsuits can be expensive, and should be considered only as a last resort.
Additional considerations:
- Expectations: Please keep in mind that although a will may be specific about an intended inheritance, other factors can sometimes intervene to modify or even entirely invalidate the inheritance. See ON Rules of Inheritance for details.
- Executor Discretion: Unless the inheritance is a specific bequest, the executor may have some discretion in deciding how to give you your share of an estate. The executor may decide to liquidate assets and give you all cash (and cash equivalents), or the executor may mix and match assets to equal your share. You have to the right to ask for your share to be given in a certain form, but the executor does not have to respect your wishes. For this reason (and others), it is advisable to try to retain a good relationship with the executor (see Working with Executors).
- Inheritance Receipts: When you receive an inheritance, the executor will likely ask you to sign a receipt, which can be required. However, the executor will often ask you, as a condition of receiving the proceeds, to waive any rights you may to decide to sue the estate or the executor in the future. Such waivers are best practice for an executor, but heirs are not required to waive their rights, so the decision is up to you. It may be best to sign anyway, to preserve the relationship and to receive your inheritance in a timely manner, but your ultimate recourse is to either convince the executor to drop the waiver, or object to the court.
Note that the term "probate" has a different meaning in Quebec, and that in Quebec the settlement process is called "liquidating a succession", and the equivalent to an executor is known as a liquidator. While there are some important differences to the Quebec process, an heir's rights remain generally the same, and various pages and sections of this Guide make note of those differences.
ON Small Estate Rights
Many provinces have laws enabling small estates to be settled without full probate, sometimes without any court involvement at all. In such cases, there may be no formally appointed executor, and the heir can directly collect any inheritance to which he or she is entitled, by providing appropriate documentation to the current asset holders.
In Ontario, small estates worth <$150K can avoid full probate, and regardless of estate size, probate is not required if an estate contains only assets exempt from probate.
Requirements
An Ontario estate qualifies as "small" if its net value is <$150K.
In calculating estate value, you should value assets as of the date of death, and subtract any debts. Do not include assets that would not normally go through probate, such as property with right of survivorship, assets with named beneficiaries (e.g., RRSPs, life insurance policies), and other standard probate exclusions.
Small Estate Process
If the estate qualifies as small, you can avoid full probate as follows:
- Prepare a Small Estate Application (see below).
- Send copies of the application to each person entitled to share in the distribution of the estate, including charities and contingent beneficiaries. You can either send by e-mail to the person’s last known e-mail address, or by regular mail or courier to the person’s last known address.
- Once at least 30 days have passed since you sent the copies, you can submit the application to the court (see bottom of page for finding court locations). You will also need to include any probate fees with the application.
- Submit your application to the court (you can do this via email if desired - see Ontario Probate Courts: File by Email).
- The court will return to you a finalized Small Estate Certificate, which you can use to demonstrate your authority to act on behalf of the estate.
- Within 180 days of receiving your Certificate, file an Estate Information Return with the Ministry of Finance.
- Settle the estate in the normal manner: collect the assets, pay any debts, and distribute the remaining estate to the rightful heirs (be mindful of any Family Entitlements).
See also Ontario's Official Small Estate Instructions for additional details, as well as Courts of Justice Act, R.S.O. 1990, c. C.43 §74.1.03.
Small Estate Application
A small estate application consists of the following:
- Application for a Small Estate Certificate (Form 74.1A)
- Request to File an Application (Form 74.1B)
- Draft Small Estate Certificate (Form 74.1C)
- Copy of any will and codicils (see Courts of Justice Act, R.S.O. 1990, c. C.43 §74.1.03(1)(d) for additional will requirements
- Proof of death
Estate Settlement Considerations
Before paying any debts or making any distributions, be sure to account for any Family Entitlements in ON, which typically have priority over everything except expenses of the last illness, funeral charges, and any estate administrations expenses.
Even if the estate does not go through probate, you may still be entitled to Executor Compensation in ON, and this compensation also has priority over most estate debts.
Estate debts have priority over most distributions in turn, so before distributing assets you should resolve any estate debts. If the estate makes any distributions beyond amounts set aside for family entitlements, unpaid creditors have the right to sue the recipients for repayment using those excess distributions. Consequently, even if the settlement process does not require you to publish a Notice to Creditors, you may want to follow ON probate rules for finding estate debts, since doing so may limit the time creditors have to pursue repayment.
If estate solvency is uncertain, an executor should consider going through official probate for the increased creditor protection it offers. Alternately, such uncertainty can sometimes persuade creditors to forgive a portion of debts, since they will want to avoid legal expenses as well, and may prefer to get something rather than nothing.
See also Making Distributions.
Court
In Ontario, estate probate is handled by the Superior Court of Justice in the county or district in which the decedent lived.
Estate Debts
Finally, note that as an heir, you are NOT responsible for paying the debts of the ON estate out of your own funds. You do NOT inherit responsibility for paying the debts of parents, for example. If the estate is insolvent (i.e., cannot pay all its bills), then creditors simply end up with less than owed, or even nothing ... as do you.
If an estate ends up being insolvent, and you somehow received a distribution anyway (perhaps through a small estate process), some provinces allow creditors to sue you to reclaim any amounts they are still owed. So you can't inherit a debt outright, but if you receive a distribution that the estate needed to pay its bills, you may be forced to pay out some or all of that distribution.
Additional Information
For more information about inheritances in general, see EstateExec Heir Guide.
In case you're interested, heir rights in other provinces can be found here:
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