What Are Ontario Probate Fees (and Who Pays Them?)
If you're handling an estate in Ontario, one of your first questions might be about probate fees. What exactly are these fees, how are they calculated, and who is responsible for paying them? Here's what you need to know.
What Exactly are Probate Fees in Ontario?
Probate fees, formally known as Estate Administration Tax (EAT), are mandatory payments charged by the Ontario government when an estate goes through probate. Probate itself is the legal process by which the courts officially recognize a deceased person’s will as valid, granting authority to the executor (also called an estate trustee) to administer the estate.
These fees are essentially taxes paid to the provincial government based on the value of the deceased person's estate. They provide official confirmation and authorization to the executor, enabling the distribution of assets to beneficiaries.
How are Ontario Probate Fees Calculated?
In Ontario, probate fees are calculated based on the total value of the deceased person's estate, which includes real estate, bank accounts, investments, and other assets that fall within the probate process. The calculation is straightforward:
No fee is applied to the first $50,000 of the estate.
A fee of 1.5% is applied on the value of the estate above $50,000.
For example, if an estate is worth $500,000:
No fee for the first $50,000.
1.5% fee on the remaining $450,000 equals $6,750.
Total probate fees would therefore be $6,750.
It's important to note that certain assets - such as jointly held property with rights of survivorship, life insurance proceeds with a named beneficiary, and registered plans (RRSPs, RRIFs, TFSAs) with designated beneficiaries - do not typically form part of the estate for probate purposes, and therefore are generally excluded from this calculation.
Who is Responsible for Paying Probate Fees?
The executor or estate trustee named in the will is responsible for calculating, reporting, and paying probate fees from the assets of the estate. This responsibility includes accurately valuing the estate’s assets, applying for the Certificate of Appointment of Estate Trustee, and ensuring timely payment of probate fees.
If probate fees are not paid promptly, interest may accumulate, and the administration of the estate may be delayed. These fees are usually paid directly from the estate's funds before any distributions to beneficiaries.
Can You Avoid Probate Fees in Ontario?
While completely avoiding probate fees may not always be practical or advisable, certain estate planning strategies can significantly reduce these fees:
Joint Ownership: Assets owned jointly with rights of survivorship pass directly to the surviving owner without going through probate.
Beneficiary Designations: Naming beneficiaries on insurance policies, RRSPs, RRIFs, and TFSAs can bypass probate.
Multiple Wills: In certain cases, especially with business owners, multiple wills can be used to manage specific assets separately, minimizing the probate fees.
These strategies should always be discussed with an experienced estate planning lawyer to ensure they align with your overall estate planning objectives and avoid unintended complications.
Still Have Questions?
Understanding probate fees and estate administration can be complex. Mariotti Law Group guides Ontario residents through probate and estate planning with clarity and confidence.
Contact Mariotti Law Group today to book your personalized consultation and ensure your estate planning is handled with the care and expertise you deserve.
Disclaimer: This article is for informational purposes only and does not constitute legal advice or create a solicitor-client relationship. For personalized advice, please consult Mariotti Law Group directly.