Consultation on estates law changes welcomed by the bar, say lawyers

MAG is considering several policy reforms

Consultation on estates law changes welcomed by the bar, say lawyers
Krystyne Rusek and Lionel Tupman

The Government of Ontario is considering significant reforms in estates law, including allowing for the virtual signing and witnessing of wills and powers of attorney and altering what qualifies as a “small estate” for the purposes of a tax exemption.

The virtual signing and witnessing of wills and powers of attorney has been allowed temporarily since an April 7 emergency Order in Council. The province is examining whether the change should be made permanent. Lawyers say this is a welcome change, provided necessary safeguards are in place to address fraud, undue influence and testamentary capacity. The temporary scheme, where a lawyer or paralegal must be one of the witnesses, alleviates some of those concerns, says Krystyne Rusek, a member of Pallett Valo LLP’s estate litigation group.

“The practitioner is able to observe the testator and in terms of conduct and understanding, and this will protect the testator from potentially being coerced into signing a will or a power of attorney. And, going forward, if the will is challenged, this could then be available evidence to establish things like capacity, or volition,” she says.

In the digital age, being able to execute wills and powers of attorney online is an access to justice issue, says Lionel Tupman, a partner at Tupman & Bloom LLP.

“There are concerns from the bar about how to implement this, but I would say, overall, the estates bar is very much in favour of making virtual witnessing of powers of attorney and wills permanent,” says Tupman, who’s practice focuses on estate and trust and civil litigation matters.

Attorney General Doug Downey told Law Times his ministry has not decided whether they will make the virtual signing and witnessing of wills and powers of attorney permanent. Downey says they are still assessing submissions from the OBA and the Federation of Ontario Law Associations.

In 2019, Ontario’s Ministry of Finance amended the Estate Administration Tax Act. As of Jan. 1 2020, estates worth $50,000 or less are exempt from the tax, which, prior to the changes, amounted to $5 for every $1,000 in the estate. Estates above $50,000 are required to pay $15 for every $1,000.

But there is still debate among the estates bar about how to quantify a small estate, and Downey is consulting with the bar on whether that $50,000 bar should be raised.

It is a geographical divide, says Rusek. While $50,000 is considered a small estate in northern Ontario, what is considered a small estate in Toronto is much more than that, she says. 

One of the rationales for the tax exemption is that the savings will incentivise people to use the probate process for small estates, says Tupman.

Downey says consultations on the appropriate number defining a small estate are also still ongoing.

“I've heard from several people that that number may be too low, that we may have to move it higher to have it be meaningful. So I'm open to that. We haven't settled on a particular number,” he says.

The MAG is also exploring how to create a simplified procedure, to allow people to do probate applications on a small estate without requiring the services of a lawyer.

One concern with simplified procedure is that it will create more work for court staff, says Rusek. Rather than the trustee having the burden to ensure proper, accurate completion of the form, with a simplified procedure, that burden may be on court staff and the registrar.

“We have very limited resources in certain estates offices and one of the concerns would be that this would actually create additional backlog on the probate process,” she says.

To get feedback on estates law policy reform ideas, as well as to discuss the COVID-19 recovery, Downey met with the estates law section of the Ontario Bar Association, on Aug. 6.

The session was led by Tupman and he says it was a welcome chance for practitioners to discuss bringing the practice up to date.

“Estates law is one of those areas which has received less attention than other areas in law reform in the last 20 years, or so,” he says. “We are excited, as the estates bar, that this government has an interest in bringing our estates and trusts legislation into the 21st century, and bringing it into line with the law which is currently in place in other provinces in Canada, as well as other Commonwealth nations.”

Decisions on necessary legislative changes to an area of law are commonly arrived it in consultation with only a select few voices, even though they bind everyone in the practice area, says Rusek.

“The bar was extremely appreciative to be included in discussions,” she says. “This doesn't always happen.”

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