Probate Planning

Where an individual dies in Ontario owning assets in their own name, an application to the court must be made to transfer that person’s ownership to the beneficiaries of their will. In this process, called Probate, the will is validated by a judge and the executor is granted the right to proceed with distributing the assets of the estate.

Before the assets can be transferred, the estate must pay Estate Administration Tax (aka Probate Tax) of approximately 1.5% on the value of any property that must go through the Probate process. 

If there is no Last Will and Testament, then the Executor must apply to the court for a determination. If the estate is passing from the deceased to his or her spouse, there is generally no probate tax payable.

Assets that are not taxable include:

• Assets that the deceased had before death but not at the time of death, such as insurance that will be paid to a named beneficiary
• Assets where there is joint ownership that automatically become assets of the other owner(s)
• Real estate outside of Ontario
• CPP Death Benefit
• RPPs, RRSPs, RRIFs and TFSAs with a beneficiary designation or beneficiary declaration
• RDSPs to which the deceased subscribed to but was not a beneficiary
• Debts owing by the deceased, such as credit card debts, car loans, lines of credit, etc.

Assets that are taxable include:

• Bank accounts (includes foreign banks)
• Real estate in Ontario, less encumbrances (such as a mortgage, collateral mortgage or lien) on the real estate. Note: use the appraised value at the date of death even if the property sells for less or more shortly after the death
• Investments (for example, stocks, bonds, trust units, options, mutual funds, TFSAs, RRSPs, RRIFs, part of the RESP that the deceased subscriber was entitled to, RDSPs for which the deceased was a beneficiary)
• Vehicles and vessels (for example, cars, trucks, boats, ATVs, motorcycles, trailers, etc., situated in or outside Ontario)
• All property of the deceased that was held in another person’s name
• All other property, wherever situated, including:
  • Goods
  • Intangible property
  • Business interests
  • Insurance, if proceeds are left to the estate

1.5% of your estate can amount to tens of thousands of dollars in taxes, most of which can be avoided by careful planning by a Probate Lawyer.

Our lawyers understand the probate planning process and can evaluate your unique situation to arrive at a solution that works for you.

Our legacy comes from helping you protect yours. Our real legacy is you.