Below is a general overview of the probate process in Ontario.
What is Probate?
The process of probating a Will is one by which the last Will of the deceased person is ‘proved’ or authenticated by the Ontario court[1]. Not all Wills need to be probated, as the executor named in a Will has legal authority to act from the moment of death. However, probate is often required in order to allow the executor to deal with the assets of the estate. This is because financial institutions will request a probated Will before they will release the assets of the deceased. The financial institutions want a probated Will as it provides evidence that the Will was the last Will made by the deceased person and was validly executed, which protects the financial institution from transferring its assets to the wrong person. It may also be advisable to obtain a probated Will to confirm the authority of the executor vis a vis other beneficiaries of the estate or to protect limitation periods if the estate may become litigious.
What are Estate Administration Taxes?
When an application is filed with the court to probate a Will, estate administration taxes are paid to the Ontario government. The estate administration taxes are levied on the value of the assets owned by the deceased at the time of death. As of January 1, 2020, estate administration taxes are $15 for each $1,000 of the value of the deceased’s assets that are over $50,000.[2] There is no maximum cap on estate administration taxes.
If the executor discovers additional assets after an application is filed, the additional tax payable on the value of those assets must be remitted.
What assets are included in the Estate for the purposes of calculating Estate Administration Taxes?
All the assets owned by the deceased at the time of death are included in determining the value of the estate. This includes bank accounts, investments, personal effects, registered plans or life insurance designated to the estate as beneficiary, and real estate owned in the sole name of the deceased.
Assets that are not included are: most assets that are jointly held with a spouse; registered plans that are designated to a named beneficiary; life insurance that is designated to a named beneficiary; and real estate located outside of Ontario. If the deceased had more than one Will, the assets that are included in the ‘non-probate’ or ‘secondary’ Will are not included. Any assets that are held in a trust that was established by the person before death are not included. Any assets that were gifted to another person by the deceased before death are also not included.
If accounts or investments are held jointly between a deceased parent and his or her adult child, these assets may or may not be included for probate purposes. Each case needs to be determined with the advice of a lawyer.
What is the Process?
The executor swears an Application before a commissioner and identifies the Will and any Codicils as an exhibit to the Application. (See Information and Documents Required for Probate of an Estate in Ontario). If there are beneficiaries other than the executor, a Notice of Application with a copy of the Will is mailed to the beneficiaries. The Application and accompanying documentation are filed in the Estates division of the Ontario Superior Court of Justice where the deceased person resided. The Application materials are reviewed by the registrar or judge, and if they are in order, the Certificate of Appointment of Estate Trustee with a Will is issued by the court and returned to the lawyer for the executor.
How long does it take to get the Will Probated?
In Toronto, it is currently taking approximately 4 months from the time of filing the Application to the issuance of the Certificate. In estates courts outside Ontario, the time period is usually less.
What happens once the Certificate is issued by the Court?
Once the Certificate is received, the lawyer prepares Notarial copies of the Certificate. The executor can then remit the Notarial copies of the Certificate to the financial institutions in order to settle the estate. The executor is also required to file the Estate Information return.
What is the Estate Information Return?
Where a Will is probated, the executor is required to file an Estate Information Return with the Minister of Finance for Ontario. The return provides the government with the opportunity to audit the value of the assets of the estate upon which the estate administration tax was paid. The return must be filed within 180 calendar days of the issuance of the Certificate of Appointment of Estate Trustee. The information to be included in the return includes the details and value of the deceased’s assets.
[1] The formal name for this process is the Application for a Certificate of Appointment of Estate Trustee with a Will
[2] Estates Administration Tax Act, 1998, as amended