Valuing assets for Ontario probate court can leave you stymied. Axess Law’s licensed probate lawyers explain probate law and estate administration taxes for probate. We help you apply to be estate trustee, when the deceased had a legal Will or if they didn’t.
Estates can be in cash, possessions, real estate, investments, pensions or even collectibles. They may be small and seem insignificant or worth millions of dollars. However do you value a deceased’s estate?
What is Probate?
Probate is the process of going to court to get permission to distribute a deceased’s last Will and testament. A probate court judge verifies their Will is final, that your application is not challenged by others and appoints you (or someone else) estate trustee. Axess Law has a probate lawyer near you who can apply for you.
Applying for Probate
Applying for probate can take a week or more in smaller communities to several months in places like Toronto. Depending on backlogs, you may encounter delays having your application reviewed by a probate court judge. Plan accordingly and avoid over committing to beneficiaries. They’ll just have to wait.
Can You Bypass Probate?
Estate trustees who try to bypass probate can be frustrated to learn most assets are subject to estate administration taxes. (Fortunately, Ontarians get a break on inheritance taxes. You pay nothing to inherit in Ontario.)
Unless direct beneficiaries are designated for assets like RRSPs, pensions or life insurance — they receive gifts without probate fees being deducted — almost everything in an estate is probatable.
Most Wills state where assets are located. But you may have to ask next-of-kin, beneficiaries, bankers, investment advisors and family lawyers where to locate the deceased’s property and possessions.
That can require you to have a grant of probate — banks, credit unions and investment firms can refuse you information without it. And land registry offices can only transfer the title to property you may need or want to sell to court-appointed estate trustees.
Your application for a certificate of appointment of estate trustee is accompanied by a calculation of the value of the deceased’s estate. The calculation is used to pay initial estate administration taxes. When you genuinely cannot find all the assets before you apply for probate, you can file a preliminary list and pay the balance later.
Axess Law’s probate lawyers can advise you on what to do if assets are missing when you apply.
Deciding Fair Market Value
Assets are assessed at fair market value (FMV) on the date of death. FMV is the price a reasonable person would pay. You can hire appraisers, accountants or other professionals to value property and possessions.
- Ontario land, houses or buildings owned by the deceased or with others, but not out of province or country property.
- The deceased’s share if they co-owned property.
- Cash or equivalents in bank accounts.
- Investments, RRSPs, RRIFs or TFSAs left to the estate, but not designated beneficiaries.
- Cars, trucks, ATVs, snowmobiles, motorcycles or other vehicles owned in Ontario, but not elsewhere.
- Clothing and jewellery.
- Collectibles like antiques, coins, art or china.
- Furniture and household goods.
Calculating Debts or Liens
- Outstanding mortgage balances or property liens owned in Ontario are deducted from estate administration fees.
- Include credit card debts, car loans and lines of credit (they can’t be deducted).
- Personal or business taxes the deceased owed are included in estate fees, for prior years and the year they died.
Even if a spouse is not on matrimonial home titles as a co-owner or joint tenant, they have a right to take an equalization payment instead of what is in the Will. They can opt to take homes, instead of other financial assets.
Common law spouses listed on title to a property as a joint tenant inherit the family home without estate fees being paid. But adult children listed as joint tenants may have to go to court to prove the deceased gifted real property to them. Otherwise, probate courts can decide real estate was meant to be shared by all the deceased’s children.
Capital Gains, Taxes and Probate
Real estate owned by the deceased is “deemed” by Canada Revenue Agency to be disposed of on their death. Capital gains on a principal residence may be exempt, if they truly lived there, but secondary homes and investments can be subject to taxes.
Axess Law can refer you to accountants or tax professionals if an estate has significant real property and you require advice on valuing it. Don’t worry — you won’t be out of pocket unless you are negligent in making valuations. Professional fees are deducted from estate assets before you distribute the Will.
What’s New in Probate Law
Probating smaller estates under $150,000 just got easier. Starting April 1, 2021, the Smarter and Stronger Justice Act amends Ontario estate law.
- Small estates are capped at up to $150,000.
- Applying is simplified, with fewer requirements and more guidance.
- Small estate certificates replace certificates of appointment of estate trustee.
- Mandatory bonds are removed for estates with no minor or incapable beneficiaries.
- Probate fees or estate administration taxes remain the same.
- Estate information returns are required 180 days after probate grants.
Probating Small Estates
Axess Law probate lawyers can advise if a small estate certificate is for you. You can still get a certificate of appointment as estate trustee if desirable.
Small estate procedures limit assets you can include in probate grants. If you think assets and liabilities may exceed $150,000, Axess Law recommends applying for regular probate instead.
Good news! Ontario charges no estate administration taxes for assets under $50,000 and just $15 for every $1,000 after that.
Why You Need a Probate Lawyer
Probating an estate without a lawyer is legal, but why would you?
Unless you’re a financial whiz or lawyer yourself, winding up an estate takes months to a year or more of your time. (That’s why it’s called an executor’s year.) Hiring Axess Law’s probate lawyers allows you to navigate legal documents and make probate court applications with ease — we do the work for you.
And if you need more legal advice, we make referrals to professionals who have the skills and experience you require.
Legal Advice You Can Trust
Axess Law’s knowledgeable probate and Wills and estates lawyers give you practical legal advice you can trust. They work through the complexities for estate trustees or beneficiaries through the probate process. Applying for probate is as easy as 1, 2, 3:
- Call our lawyer line for a retainer and to schedule a remote, socially distanced video call or in person appointment. Your first consultation is free!
- Meet your Axess Law licensed probate lawyer for a quick consultation. We give you a quote for our probate services.
- Sign your completed small estate certificate or certificate of appointment of estate trustee application.
We submit your application and answer any questions you have about probate, Wills or settling estates.
Make Probate Appointments Online
Use our easy online booking form, phone our 1-647-479-0118 lawyer line or pop by any open retail location to make a probate appointment. We’re open long hours, day or evening, throughout the week. No need to take time off work — we’re available weekends too. Our probate lawyers (Toronto and area) can meet you in person at convenient law offices nearby your community or book virtual video calls anywhere you are in Ontario. Let’s get started!