Estate Planning

Statutory Authority to Dispense with Security Bonds

By Hull and Hull LLP

Section 35 of the Estates Act establishes a general requirement that estate trustees (though not executors) post security bonds.  Rule 74.11(1) of the Rules of Civil Procedure contains a mechanism defining the amount and form of the bond.  Of course, many if not most applications for a certificate of appointment of estate trustee with a will include a request for an order dispensing with the requirement to post a bond.  Rule 74.11(1). 

Authority for a court to make an order dispensing with the requirement to post a bond is found in section 36 of the Estates Act:

Trust companies need not post security bonds pursuant to section 175(4) of Ontario's Loan and Trust Corporations Act:

"(4)  Despite any rule, practice or statutory provision, it is not necessary for a trust corporation approved under subsection (2) to give any security for the due performance of its duty as executor, administrator, trustee, receiver, liquidator, assignee, guardian or committee unless so ordered by a court."

Of course, section 40 of the Estates Act allows an interested party to bring a motion to impose the requirement to post a bond or increase the amount of an existing bond (the corresponding Rule is 74.11(2)).

Enjoy your day,

Chris

Full post as published by Toronto Estate Law Blog on April 15, 2010 (boomark / email).