Probate, executor, and probate taxes are unfamiliar to many of us who have never experienced death in the family. But sooner or later it will come and we would have to get familiar with the terms.
Here, you can find everything the legal terms you need to know when a family member dies in Canada.
What is my “Estate”?
Your “estate” consists of all the things that you own by yourself at death. Your car, bank accounts, clothes, jewelry, business interest, etc. If you own it, it is part of your estate. Joint accounts and beneficiary designation accounts such as TFSA or life insurance are NOT part of your estate for probate purposes.
How does my estate (assets) get transferred after I die?
Your assets that you own by yourself, can be transferred in two ways: either in accordance with a Last Will and Testament that you leave prior to your death, which states exactly who you want to have what, or if you die “intestate” (without a Last Will and Testament) the Ontario Succession Law Reform Act dictates beneficiaries your property will be transferred to.
Letters of Probate
In order to give or transfer your estate assets to a beneficiary, the Executor or Estate Trustee (the person in charge) has to be named, appointed, and provided the official authority to do so. This appointment is called a Certificate of Appointment of Estate Trustee With or Without a Will. This formerly was referred to as Letters of Probate.
See below for information on how to transfer a car, or transfer title to real estate property.
I do not know if there is a will, what do I do?
- If you are not sure whether the person who died had a Last Will and Testament or not, you can contact the estates department of the local Superior court in the community where the deceased lived to see if a will was registered. For court locations and contact information, you can use the following link:
- You can also list an advertisement on a new online website Notice Connect. Among other services, they can publish a notice to lawyers, requesting that any lawyer known to have a prepared and/or stored a will for the deceased, contacts you.
- Ask, Ask, Ask!! Ask people like the deceased’s accountant, life insurance broker, financial broker, lawyer, and closest friend, as to whether they know of any Will the person may have left.
Do I need the original Will?
Yes! The Application for Certificate of Appointment with a Will requires the submission of the original will along with an Affidavit of Execution. The Affidavit of Execution is a sworn statement from one of the witnesses, stating the formal requirements were followed. If the original will can not be found or the Affidavit of Execution is missing, there are some things you can do to either attest to the signature or contact the witnesses. Your lawyer should be able to help you with these alternatives.
Who is in charge of my estate?
The Executor or the Estate Trustee is the person who is in charge of transferring (giving) your estate assets to the intended beneficiary. The Executor has many duties including but not limited to arranging the funeral, collecting all your assets, paying off your debts, preparing and paying your taxes, and distributing what is left.
What is Probate and do I have to do it?
When someone dies owning an asset (bank account, property, vehicle etc.) by themselves, in order to transfer the ownership or title of that asset, you must probate. Probate is the court process for when a person applies to be the Executor and obtains a Certificate of Appointment. This certificate is what grants the legal authority for the Executor to perform all the duties needed. This used to be called “Letters of Probate.” The Executor or “Estate Trustee” is the named person who follows the will and distributes the estate. If there is no Last Will and Testament, then the Executor will follow the rules under the Ontario Succession Law Reform Act.
What assets are excluded from Probate?
- Jointly owned assets with a right of survivorship (JTWROS)
- RRSPs, RRIFs, TFSAs with a named beneficiary other than ‘Estate’
- Insurance proceeds paid to a named beneficiary other than ‘Estate’
- Real estate owned outside of Ontario
- Gifts made during your life
- Assets in a trust created during your lifetime (inter vivos trusts).
What is a Certificate of Appointment of Estate Trustee?
A Certificate of Appointment of Estate Trustee is a document issued by the court that appoints someone as the executor and gives them the authority to manage and distribute the estate of a person who either died with a Last Will and Testament or who died intestate (without a will). The Certificate of Appointment proves the authority of the Executor to administer the provisions of the deceased’s will or if there is no will, as directed by the Ontario Succession Law Reform Act lists who may apply to become the Executor of the estate as well as who the heirs of law would be.
How long does it take to probate?
Right now the courts are experiencing a backlog in processing the Applications for a Certificate of Appointment of Estate Trustee (Executor). We are currently seeing process times up to a 12-14 weeks at some local courts. Overall, it typically takes one year to probate an estate. If there is litigation, trusts or other complicated issues, it could take years.
Probate Taxes In Ontario
Do I have to pay a tax to probate? I thought there was no “death tax”?
While there is no “death tax” in Ontario, you do have to pay an “Estate Administration Tax” (use to be called a Probate Fee) to the Ministry of Finance. This tax is calculated based on the total value of all assets owned by the deceased at the time of death that will go through the probate process. It is about 1.5% of the value of the estate. You can find a calculator here:
This fee is payable to the Ministry of Finance at the time you submit your Application of a Certificate of Appointment of Estate Trustee.
Do I have to file taxes for the deceased?
Yes! The Executor must file two returns on behalf of the deceased. A return reflecting the time period during the year the person was alive, and then a second final return for the remaining of the year. Executors should seek the advice of an accountant who is familiar with processing terminal returns. Executors should also request a Clearance Certificate from the CRA to confirm that all assessments are final. Until the receipt of this CRA clearance, it is suggested that the final distribution of the estate not be made to protect the estate in case there is an amount due.
What do I do with the car? Who do I contact?
- Cancel the deceased’s driver’s license with Service Ontario
- Cancel the car insurance: Here is a link to help you find contact information for car insurance companies.
- Cancel CAA: Here is a link to help you contact CAA after someone dies.
- When someone dies owning a car, it can be transferred by visiting Service Ontario. You will need either the Certificate of Appointment and a copy of the will, or a letter from your lawyer stating the probate was not required. We are familiar with this process and can help provide you with this letter. Contact us at Amy MacAlpine, Associate Lawyer of Wills & Estates.
- Here is a useful link from Service Ontario for more information:
What is this Estate Information Return?
Executors beware! If you go through the probate process and have been issued a Certificate of appointment any time after January 1, 2015, you are subject to new reporting rules. The Estate Trustee or Executor, must file an Estate Information Return to the Ontario Ministry of Finance within 90 calendar days of the issued Certificate of Appointment. This is a detailed inventory reflecting everything a person owned at death and the value of those assets. There are heavy penalties and a lifetime undertaking to report any changes in the estate value. In 2016, we are starting to see the first of audits and are waiting to see how penalties are actually served. The Registrar has reported that the amount of administration tax collected has already tripled since the rule has been implemented. You can bet that this requirement is not going anywhere!
Legal Cost for Obtaining a Certificate of Appointment
The costs to hire a lawyer for some services, such as for obtaining the Certificate of Appointment, can be charged to the estate. The Executor does not have to personally pay for this service. Certificate of Appointment of Estate Trustee with a Will applications start at $3500, plus disbursements and HST. Costs for legal additional counsel, support and/or administration services are determined on a case by case basis.
**All pricing is reviewed and quoted with the client prior to being retained
Hummingbird Lawyers LLP services the Greater Toronto area, York Region including Vaughan, Richmond Hill, Aurora, Newmarket, Thornhill, Markham, North York and surrounding areas. Hummingbird Lawyers LLP is afull-servicee firm offering legal support in real estate, corporate law, civil litigation, family law, estates, and wills.
If you require more information please do not hesitate to contact Amy MacAlpine, Associate Lawyer of Wills & Estates.
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Know that we got you covered.
- FAQ From CRA
- FAQs about Estates answered by the Attorney General
- What is the Administration Tax on?
- View Amy’s Blog