Did you know that in Ontario, probate fees on an estate have been replaced with something called the Estate Administration Tax? In this multi-part series on the new Estate Administration Tax, I will share information that you and your estate representative will need to know. This blog post focuses on what are considered the deceased’s assets and the Estate Administration Tax (EAT) payable on these assets.
When a person dies with or without a will, someone has to administer the estate. This person or institution is called the estate representative. The estate representative must have permission from the Ontario Superior Court of Justice via the Certificate of Appointment of Estate Trustee, in order to deal with the estate property. This certificate informs banks, trust or insurance companies or other financial institutions that they are dealing with the authorized person.
The EAT is paid as a deposit when the Estate Representative applies for the Certificate of Appointment of Estate Trustee and is payable on the total value of all assets owned by the deceased at the time of their death.
What Assets are Included?
- Bank accounts, wherever situated
- Investments such as stocks, bonds, stock options or trust units, wherever situated
- All property of the deceased which was held in another person’s name
- Vehicles and Vessels including cars, SUV’s, boats, ATV’s, motorcycles, wherever situated
- Real estate in Ontario less the value of encumbrances on title
- All other property, including goods, intangible property, business interests, Insurance with the Estate named as the beneficiary
What Assets are excluded?
- Real Estate outside of Ontario
- Canadian Pension Plan Death Benefit
- Assets that pass outside of the Estate such as:
- Life Insurance proceeds paid to a named beneficiary other than the Estate
- Jointly held assets with right of survivorship – usually the primary residence
- Investments with a named beneficiary
The Ontario government charges a fee for this certificate based on the value of the assets in the deceased’s estate. Formally known as a probate fee, this is now called the Estate Administration Tax or (EAT). The level of taxation on an estate has not changed. The EAT payable is $5.00 per $1,000.00 for the first $50,000. For example, if the estate is valued at $50,000 then $250.00 is payable to the Ontario Ministry of Finance.
If the estate is valued at $200,000.00 then $250.00 is payable on the first $50,000 and $15.00 per thousand on the remaining $150,000.00. In this example: $15.00 x $150,000.00 = $1,500.00. The total EAT payable would be $250.00 + $1,500.00 = $1,750.00.
Wow are you overwhelmed yet? But wait there are more details available by visiting:
What can you do ahead of time to make things easier for your Estate Representative?
1. Name a beneficiary and second beneficiary on life insurance policies, RRSP’s, RRIF’s, TFSA’s
2. Own assets jointly with right of survivorship, where applicable
3. Sell or gift vehicles, vessels, goods, intangible property, business interests that you no longer use or enjoy.
4. Organize your important papers
Do you need help doing this? If so then contact me or click here to purchase your Taking Care of Business Estate Representative Workbook. This workbook will help you organize your important papers in one place – a loving gift for your Estate Representative.
As always I welcome your feedback and questions. You can connect with me via email or telephone, leave a comment here on the site or click the contact tab at the bottom of the screen if you are reading this post on the website. Don’t forget to join in the conversation on Facebook and Twitter too!
Until next time
Katherine Downey is the #1 Funeral Preplanning Professional in Canada for the fourth time. She is a professional educator, author, radio host, licensed funeral director and insurance advisor. To set an appointment or have your questions answered, please contact Kat directly.