While beneficiaries don’t have legal rights, they do have legal expectations. These legal expectations are for the executor and estate trustee of the estate to perform their duties properly. If those expectations are not met, beneficiaries can then use their authority as beneficiaries to force action by taking the executor and estate trustee to court.
Introduction to Ontario's Inheritance Laws
A beneficiary is a person or organization that is receiving some or all of a deceased person’s property after they die. Based on the inheritance laws in Ontario, the question of whether you are a beneficiary depends on whether the deceased person passed away with or without a will.
If the deceased person didn’t have a valid will, the Succession Law Reform Act will dictate whether you are a beneficiary who will receive some or all of their property. If, on the other hand, a person died with a valid will, their property will be distributed to the beneficiaries that they have personally chosen in their will. Since this is based on their wishes, this may or may not include you.
A beneficiary does not have the same legal rights and obligations that an executor and estate trustee does (unless, of course, they are also appointed as the executor and estate trustee). They have legal expectations and entitlements, however, including the entitlement to receive notice if probate is being applied for, the entitlement to receive their inheritance, the entitlement to an accounting of all the executor and estate trustee’s dealings if they are a residual beneficiary, the entitlement to apply to the court to have an executor and estate trustee removed, and the entitlement to challenge the validity of a will.
Understanding the Probate Process in Ontario
Probate is the process in which the court will approve of a deceased person’s will, if they had one, as their last valid will and testament. The court will also appoint a person to act as the executor and estate trustee of a deceased person’s estate, whether they had a will or not.
Examples of reasons why probate may be required during estate administration in Ontario include:
- The deceased owned real property that is not jointly owned
- A third party (ex. financial institution) demands it
- The deceased died without a will
- There’s a dispute about the validity of a will
If probate is required, then an Application for a Certificate of Appointment of Estate Trustee (also known as a probate application) must be filed with the court. Estate administration tax must also be paid on the value of the estate assets.
It’s also worth noting here that the probate process may be required for any kind of will, whether it’s a handwritten will, a digital will, an online will, or a will made with the help of a lawyer. An exception would be notarial wills, which are common in Quebec.
As a beneficiary, you are entitled to receive notice that probate is being applied for, which includes a copy of the probate application which discloses the value of the estate assets that are subject to the estate administration tax.
Once the Certificate is obtained, the executor and estate trustee will then have the authority to administer the estate including distributing the estate assets to you and any other beneficiaries when it’s time to do so. Since the courts often experience a backlog of probate applications, there may be a delay in when you and any other beneficiaries can receive an inheritance.
Executor Duties and Beneficiary Entitlements
When they are administering a deceased person’s estate, the executor and estate trustee have certain duties and responsibilities that are owed to you as the beneficiary and any other beneficiaries.
For example, they need to provide you and any other beneficiaries with notice if probate is being applied for, they need to make distributions to you and any other beneficiaries, and they need to prepare an accounting for the beneficiaries of the residue of the estate of all their dealings which includes a list of the deceased person’s assets and the dispositions of the estate assets.
Since the executor and estate trustee are in a fiduciary relationship with the beneficiaries of the estate, they must act in the best interest of you and any other beneficiaries and treat you all equally.
If you believe that the executor and estate trustee is not doing this, you are entitled to apply to the court to have the executor and estate trustee removed.
Does the Beneficiary have a Right to see the Will in Ontario
You do not have an automatic right to see the will in Ontario even if you are a beneficiary. You can, however, request to see it from the executor and estate trustee.
In situations where probate is required, the executor and estate trustee will need to file a copy of the original will with the court when they file the probate application. Since the original copy of the will is filed with the court, it becomes a public document at that point and anyone, including yourself, can request a copy.
If you are a beneficiary of the residue of the estate, you are entitled to receive notice that probate is being applied for along with a copy of the entire will.
On the other hand, if you are a beneficiary of a specified item of property or stated amount of money (known as a legacy), you are entitled to receive notice that probate is being applied for, though the executor and estate trustee is only required to provide you with a copy of the part of the will that includes your inheritance.
Can a Beneficiary Sue an Executor in Ontario?
Settling an estate can be a stressful and tiresome process for anyone involved. During the process, you may disagree with some of the decisions that the executor and estate trustee makes, but that does not mean that you can sue them.
If, however, an executor and estate trustee fails to fulfill their duties, you can apply to the court to have them removed. An executor and estate trustee may be removed by the court if they have breached their fiduciary duty by not handling estate assets and debts properly, if they have not acted impartially, or if they have not provided a proper accounting to beneficiaries of the residue of the estate.
The legal process of trying to remove an executor and estate trustee can be costly and time-consuming, as it requires going to court. It can also delay the administration of the estate, including when you and any other beneficiaries can receive an inheritance.
Before starting this legal process, consult a lawyer and discuss your options.
Contesting a Will as a Beneficiary
You may find yourself in a situation where you want to contest the validity of a will. Since you’ve been named a beneficiary in the will you have a financial interest in the estate and therefore have the necessary standing to do so. But you also need the necessary grounds to do so.
You may want to contest the will because the inheritance that was left to you in the will is less than what you expected or were hoping for, but that isn’t sufficient enough grounds.
Some of the specific grounds you can use to contest a will include
- Fraud (fraudulent activities influenced the testator in the making of the will, or the will itself is believed to be a forgery or a misrepresentation of the testator’s wishes);
- Undue influence (the testator was influenced or coerced by someone else to make their will a way that does not reflect their wishes);
- Lack of capacity (the testator lacked the required mental capacity to make a will at the time they were making it); and
- Non-compliance with the legal requirements of a valid will (ex. the will not being properly witnessed)
If you choose to contest a will, you’ll need to first file a Notice of Objection with the court in order to begin the estate litigation in Ontario.
It’s worth noting that will disputes in Ontario can be risky and costly. If you are not successful with your case, you may be responsible for paying your own legal costs as well as the estate’s legal costs. Contesting a will in Ontario can also delay the administration of the estate including when you and other beneficiaries can receive an inheritance.
For will contests, it is helpful to consult a lawyer first and discuss your options.
Taxes and Inheritances
In situations where probate is required, estate administration tax will need to be paid on the value of the estate assets when the probate application is filed with the court.
Beneficiaries are entitled to receive notice when the probate process begins, which includes a copy of the probate application, which discloses the value of the estate assets that are subject to the estate administration tax.
The estate administration tax and other taxes, including income taxes that are due for the year of the deceased person’s death and income taxes for any trusts, should be paid by the estate before you and any other beneficiaries receive an inheritance. Because of this, taxes reduce the amount of the inheritance that you and any other beneficiaries may receive.
An upside though is that you and any other beneficiaries will not have to pay tax on your inheritance since there is no inheritance tax in Ontario.
Protecting your Entitlements as a Beneficiary
If you are a beneficiary of a deceased person’s estate, and you have concerns that the executor and estate trustee is not performing their duties properly, you should first consult a lawyer to discuss your options so that you can avoid unnecessary costs and delays.
Navigating the estate planning process may seem like a complex maze, but we’re here to help you get your documents in order and give yourself – and your loved ones – peace of mind for the future.
If you want to be able to choose who your own beneficiaries will be after you die, you can do that by making a will today. Or, if you're interesting in learning more about estate planning and advance care planning in Ontario, click here.
