Aug 17, 2022
The complete guide to probate fees in BC
Set by the probate fee act of British Columbia, probate fees range from 0.06 to 1.4% of the estate's value - in this post, we break down the probate fee structure in BC.
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Probate fees in Ontario, or more formally known as the estate administration tax is a fee that is paid once the executor applies for the certificate of appointment. This fee is charged to the estate, but the executor or “estate trustee” is ultimately responsible to make sure the estate pays the tax.
In Ontario, the probate fees are:
This tax is set by the Estate Administration Tax Act, 1998 S.O. 1998, Chapter 34.
Going through the probate process and settling an estate can prove to be a lengthy and costly process, especially if it is your first time. While there are several tactics you can employ to reduce the probate timeline, probate fees in most instances are unavoidable.
**Important to note;
Let’s do some examples of calculating the estate administration tax:
Here's how probate fees are calculated on a $250,000 estate in Ontario;
The first $50,000 is void.
$200,000 x 0.015 = 3,000
Total estate administration tax: $3,000
Here's how probate fees are calculated on an $850,000 estate in Ontario;
No payment on the first $50,000
$800,000 estate x 0.015 = 12,000
Total estate administration tax: $12,000
If this calculation is still unclear, Clear Estate’s Ontario Probate Fee Calculator is here to remove all the guesswork based on the value of the estate. This will give you a quick snapshot of the probate fees you should expect to pay in Ontario.
Before beginning the probate process, you need to create an inventory of assets that are subject to probate. Once you’ve created your inventoried list of assets, you then need to define the fair market value for the eligible probate assets as of the time of death.
You will then be able to calculate how much probate fees the estate will incur.
According to the attorney general of Ontario, these are the assets not subject to probate;
When determining the estate value the following accounts are exempt from deduction of estate value:
- Credit card debt, personal debt, margin debt
- lines of credit
- car loans
- student debt/loans
- investment loans
- tax arrears
Ontario has some of the highest probate fees in all of Canada. With fees totalling up to 1.5% of the value of an estate, this can prove to be costly for estates of all sizes.
However, there are a few ways to reduce these costs.
While probate fees can be significant, there are several strategies that can help to minimize them. By taking some time to plan ahead, you can ensure that your loved ones are not faced with an overwhelming financial burden after your death.
You can also read our full in-depth post about avoiding probate in Ontario: here
The estate trustee has 180 days from the date of receiving the Certificate of Appointment of the Estate Trustee to file the return with EAT. The purpose of this return is to provide a detailed listing of all assets of value in the estate so that you accurately pay the estate administration tax.
Failure to file the estate information return within 180 days, or to file a false EAT return can incur penalties. Inexperienced estate trustees should work with an accountant or an experienced estate professional to accurately complete the return and avoid penalties.
In Ontario, the Estate Administration Tax (EAT) must be paid in full to the provincial government once the probate application is filed. The tax is usually paid by certified cheque or money order and is sent to the Minister of Finance Ontario.
In the case where an estate isn’t as liquid but is asset rich, the estate trustee or beneficiary may be open to “loaning” the probate fee payment to the estate.
In this case, the loan is repaid for by the estate to the estate trustee after probate has been completed. Either way, it is important to budget for the EAT when planning for probate fees.
Probate is typically required for most estates in Ontario unless it has been waived due to estate planning. While avoiding probate in Ontario is rare, there are certain instances where this legal process is not necessary. One instance where probate is not required in Ontario is when the estate is passing from “the first spouse to die to their partner.”
The deceased must have named their spouse as the beneficiary on all investment, banking and retirement accounts as well as life insurance policies and pension plans and created a joint right of survivorship for the property. In this case, there would be no estate to evaluate as all assets have already been distributed to either spouse.
If the estate is passing from one generation to another (parent to children), by contrast, then the probate process is typically required in Ontario. Finally, if a financial institution where funds are held demands probate in Ontario, then the probate process is required.
The probate fees in Ontario can be complex to understand and calculate. However, with the help of our estate administration tax calculator, you should be able to get a good estimate of what your fees may be.
It’s important to remember that these fees may change depending on the value of the assets involved in the calculation and that some assets are exempt from probate. If you have any questions about probate fees or how to pay them, it’s best to speak with an estate professional for advice.
ClearEstate offers personalized support, offering estate executors and beneficiaries alike access to estate administrators and one-on-one coaching.
Our automated platform simplifies estate planning and estate settlement, and is proven to save you money. In fact, the national average for estate settlement fluctuates between 14 and 18 months. Clear Estate, by contrast, can reduce that timeline to less than a year. If ever you have any other probate questions in Ontario, you can always book a free consultation with Clear Estate or visit our blog for more information before embarking on this process.
In Ontario, probate fees are paid for by the estate. This means that if you are the estate trustee, you will be responsible for paying the probate fees. Probate fees are a “tax” that is levied by the government on the value of the estate.
The probate fee is calculated as 1.5% of the value of the estate and is payable to the court when applying for letters of administration.
It's a common question: are principal residences subject to probate tax in Ontario? Principal residences in Ontario still count towards the total estate's value, and as such, are subject to probate fees. They may also be subject to capital gains tax upon administering and final distribution of the estate.
However, some exceptions may apply in certain cases. For example, if the deceased owned the property jointly with another person, the surviving owner may be able to avoid probate entirely. It's always best to speak with a qualified legal professional to determine what taxes and fees may apply in your specific case.
In short, the answer to the question is mostly yes - all wills go through probate in Ontario. The main reason for this is that most estates in Ontario are worth over $50,000. Most financial institutions will also ask for proof of letters of administration when releasing the funds of the deceased.
For savvy estates, though, it is possible to avoid probate completely. This can be done through proper estate planning, such as owning property under joint tenant ownership with a spouse, the use of trusts, and beneficiary-named accounts. By taking these steps, it is possible to save both time and money in the long run.
Use our 12-step blueprint to probate, avoid settlement delays, and settle estates sooner.Download yours for free!