What People Need to Know About Probate in Ontario
The settling of an estate often involves probate, where the court grants someone authority to act as an estate trustee for the deceased. This procedure, set out in the Estates Act, also confirms that the deceased’s will is their last Will and Testament.
Estate trustees can file an application for an estate certificate (previously called “letters probate” or “letters of administration”) at the Superior Court of Justice, in the county or district office when the testator or intestate lived at the time of death. If that probate application is successful, the court issues a Certificate of Appointment of Estate Trustee, evidencing that the person named in the Certificate has the legal authority to deal with the estate and its assets.
To help people avoid common errors when completing this application, the Attorney General provides this guideline.
As our associate Sydney Osmar has noted, people can now file probate applications, supporting documents and responding documents by email to the Superior Court. Sydney’s blog post provides helpful information about sending these documents electronically, with the email address for each court location listed here.
Certificates of Appointment are not always required when it comes to an estate administration, but they may be if:
- the deceased died without a will;
- the will does not name an estate trustee;
- a financial institution requires proof of a person’s legal authority to receive the financial assets of the deceased; or
- the estate’s assets include land or buildings that do not pass to another person by right of survivorship.
One of the times probate will not be necessary is if the entire estate is held jointly, and all assets are passing to the surviving joint owner by right of survivorship. A scenario might include a husband and wife with a joint bank account and a jointly-owned home. If the husband died and left the entire estate to his wife, probate can be avoided since banks and financial institutions have no risk exposure.
The Estate Administration Tax, better known as probate fees, is charged on the value of the estate if a Certificate of Appointment is applied for and issued. Estate trustees must be able to substantiate the fair market value of the assets at the time of death through documentation, such as financial statements or valuations from appraisers.
Assets to include in determining the value of an estate include real estate in Ontario, bank accounts (including foreign banks), investments, vehicles and insurance (if proceeds are left to the estate).
Once the value of the entire estate is determined, you can then calculate the tax. If the estate is worth $50,000 or less, you do not have to pay any probate fees, although you still must file an Estate Information Return within 180 calendar days after the estate Certificate has been issued.
For estates valued over $50,000, the tax will be calculated as $15 for every $1,000 (or part thereof) of the value of the estate on top of the $50,000 exemption. For example, for an estate valued at $240,000, you would only pay tax on $190,000, resulting in $2,850 being owed to the Minister of Finance.
Use this tax calculator to determine the amount owing.
The probate process can be time-consuming and confusing, which is why many people rely on the services of a wills and estates lawyer to help guide them through the paperwork and procedures.
Please feel free to call me if I can assist you – and have a great day,