Probate

(a) Are there probate fees in Ontario and if so, how are they determined?

Summary

The Estate Administration Tax (commonly known as probate fees) is currently 0% for the first $50,000 and 1.5% on the value of all assets over $50,000 (the value is rounded up to the nearest $1,000 prior to determining the tax).

Discussion

The Estate Administration Tax Act (Ontario) (the “EATA”) provides that the amount of estate administration tax (“EAT”) payable is $0 for each $1,000 or part thereof of the first $50,000 of the value of the estate and $15 for each $1,000 or part thereof by which the value of the estate exceeds $50,000 (see EATA s. 2(6)). If the value of the estate is less than $50,000, there is no EAT payable (see EATA s. 2(2)).

The value of the estate includes all of the property that belonged to the deceased at the time of his or her death. However, a testator may use multiple wills, and pay the EAT only on the assets governed by the will submitted probate EAT (see EATA s. 1(1) and s. 32 of the Estates Act (Ontario)).

(b) What assets pass outside the estate and are therefore not subject to probate?

Summary

Assets that are held jointly with the right of survivorship, and registered accounts and life insurance policies with valid beneficiary designations, may pass outside the estate to a designated beneficiary.

Discussion

Assets held in joint tenancy with a right of survivorship pass by operation of the death of the joint tenant to the surviving joint tenant, and therefore do not form part of the estate for the purposes of probate or paying EAT.

Registered accounts, such as RRSPs, RRIFs, or TFSAs, which have a valid beneficiary designation pass by operation of the death of the account holder to the named beneficiary or beneficiaries. Under Ontario’s SLRA, a person administering a registered plan is discharged on paying the benefit to the person designated under the latest designation. Similarly, insurance policies with death benefits may also be paid to a beneficiary under the Insurance Act.

Further, under conflict of laws rules, real property is subject to the laws where it is situated; accordingly, real property outside of Ontario is not included in determining the value of the estate.

(c) Can multiple wills be used to avoid probate?

Summary

Multiple wills can be used to avoid probate on certain assets.

Discussion

The use of multiple wills is allowed as a probate reduction strategy. Under this strategy, one will, often called the “Primary Will” or “Probate Will” is used for assets that a Certificate of Appointment of Estate Trustee With a Will (i.e., a probate certificate) is needed to deal with, and a “Secondary Will” or “Non-Probate Will” is used for assets that do not require a probate certificate. EAT is only paid on the Primary Will.