How do I know whether an estate requires probate in Ontario?
If you are the executor of an estate in Ontario, you may be wondering whether you need to go through the probate process. Probate is the legal procedure of proving that a will is valid and confirming the authority of the executor to administer the estate. Probate also involves paying an estate administration tax (EAT) to the provincial government based on the value of the estate assets.
Probate is not required for every estate in Ontario. However, there are certain circumstances that will require you to apply for probate, such as:
The deceased person owned real estate in Ontario that does not pass to another person by right of survivorship. For example, if the deceased owned a house as a tenant in common with another person, or if the deceased owned a condo unit solely in their name, you will need probate to transfer or sell the property.
The deceased person had financial assets held by a bank, an investment firm, or another institution that requires proof of your legal authority to access or transfer the funds. For example, if the deceased had a bank account, a GIC, a mutual fund, or a stock portfolio that did not have a designated beneficiary or a joint owner, you will need probate to claim or distribute the assets.
The deceased person had other assets that require a court order or a certificate of appointment of estate trustee to deal with. For example, if the deceased had a lawsuit pending, a business interest, or a pension plan that did not have a beneficiary, you will need probate to manage or resolve these matters.
There is a dispute or a potential dispute about the validity of the will or the appointment of the executor. For example, if the will is unclear, incomplete, or contested by a beneficiary or a creditor, you will need probate to have the court approve the will and your authority as the executor.
If none of these circumstances apply to the estate, you may be able to administer the estate without probate. However, you should always check with the person or institution holding the estate assets or requiring a payment or action by the estate to see if they require you to obtain probate.
How much does probate cost and how long does it take in Ontario?
The cost and time of probate in Ontario depend on several factors, such as the value and complexity of the estate, the location and availability of the court, and the efficiency and accuracy of the executor and the lawyer.
The main cost of probate is the estate administration tax (EAT), which is calculated as follows:
No tax is payable on the first $50,000 of the estate value.
$15 is payable for every $1,000 of the estate value over $50,000.
For example, if the estate value is $250,000, the EAT is $3,000 ($0 for the first $50,000, plus $15 x 200 for the remaining $200,000).
The estate value is based on the fair market value of all the assets owned by the deceased person at the time of death, minus the value of any encumbrances, such as mortgages or liens. The estate value includes assets that require probate, as well as assets that do not require probate.
In addition to the EAT, there are other costs associated with probate, such as legal fees, accounting fees, appraisal fees, and other expenses. These costs vary depending on the size and nature of the estate and the services required by the executor and the beneficiaries.
The time of probate in Ontario also depends on various factors, such as the volume and backlog of the court, the completeness and accuracy of the application, and the existence and resolution of any issues or objections. Generally, it can take anywhere from a few weeks to several months to complete the probate process.
Acting as an executor of an estate can be complicated and legal advice relevant to each individual situation is crucial: if you have questions, please contact us to discuss.