Probate 101
Many people have heard the word probate used before but may not understand its legal meaning or how it fits into estate administration. Probate comes from the phrases “Letters Probate” or “Letters of Administration,” which is what estate certificates in Ontario were previously called.
While that province recently changed from calling it Letters Probate to calling it a Certificate of Appointment of Estate Trustee, some provinces, such as British Columbia and Saskatchewan, still use the word probate, as in Letters Probate or Probate Grant.
In Ontario, people frequently use the word probate when they mean that they are filing for an estate certificate. So, when they say they’re filing probate, they’re filing for a Certificate of Appointment of Estate Trustee.
Some people also use the word probate when they’re referring to estate administration. Estate administration includes the probate process and involves everything from arranging the funeral to filing income tax and distributing the estate. Probate is just one part of the estate administration process.
When is probate needed?
When someone dies and owns certain assets—such as real estate or financial investments—transferring the ownership of those assets may require “probate.”
Probate is the procedure through which one of two things happen:
Someone requests the courts give them the authority to act as an estate’s trustee
Someone asks the courts to confirm that the person named in the Will has the authority to serve as the estate’s executor.
The estate trustee (sometimes called the executor) is the individual the courts recognize as having the authority to manage or distribute an estate.
In Ontario, that permission is given through the Certificate of Appointment of Estate Trustee.
Probate with a Will
If the person who died had a Will and named you in the Will as the estate trustee or executor, you still might have to submit an application to the court to be given the authority to act as the trustee. The court must also confirm that the Will it received in the application process is the most recent valid Will.
If the court is satisfied that you have the authority to act as the estate trustee and that the Will is the last valid Will, it will issue a Certificate of Appointment of Estate Trustee with a Will. This acknowledges your legal authority to act as the estate’s trustee.
Probate without a Will
If there is no Will, probate is required for you to act as the estate’s executor. You may apply and the court must first determine if you are eligible to be a executor. If the court is satisfied that you are, it will issue a Certificate of Appointment of Estate Trustee Without a Will. You must then follow the rules set out in the Ontario Succession Law Reform Act when distributing the estate.
Although all provinces have some form of probate, the regulations and processes regarding probate vary from province to province. In BC, you must apply for probate when the deceased owns land in their name and if an institution—such as a bank or ICBC—requires it before transferring assets.
What is a Certificate of Appointment of Estate Trustee?
Previously known as Letters Probate, it is a document that the Ontario court issues appointing you as the estate’s executor. This document gives you the legal authority to manage and distribute the estate.
If the person died with a valid Will, then you as executor can settle the estate according to the wishes laid out in the Will. If the individual died with no valid Will (that is, they died intestate), then you must manage the estate according to the rules in the Ontario Succession Law Reform Act.
Under the province’s Succession Law Reform Act, if a person dies with no Will, you distribute the estate based on the deceased’s relationships. For example:
If there is a surviving spouse, the spouse receives the first $200,000 of the estate.
Anything above $200,000 gets shared between the spouse and any descendants.
If there is no spouse, the deceased’s children inherit the estate.
If there is no spouse and no dependents, the deceased’s parents inherit the estate.
After that, the deceased’s siblings inherit the estate.
In other provinces, the rules vary regarding how to manage an estate if the deceased died intestate.
One part of the probate process is that the executor must provide notice to all of the beneficiaries. This allows them to make their voices heard if they have something to say about how the process is unfolding. After the Certificate of Appointment of Estate Trustee is granted, the executor has the authority to manage and administer the estate.
When is a Certificate of Appointment of Estate Trustee needed?
Not all estates require a Certificate of Appointment of Estate Trustee. There are situations when an estate can be settled without going through the court. Not every financial institution within a province requires probate—some institutions may require probate, whereas others do not, and some only require it based on the size of the estate or the size of the account.
When you are required to apply to the court for probate
There are many scenarios that require you to apply to the court to be appointed the estate trustee. You are required to apply to the court for probate if:
The deceased individual dies without a Will
There is a Will, but it does not name an executor
A financial institution (such as a bank) needs proof that you have the legal authority to receive money or investments from the deceased
The estate includes real property that does not pass to another person through the right of survivorship
There is a dispute about who should act as executor
There is a dispute or the potential for a dispute over the validity of the Will
There are beneficiaries in the Will who cannot provide legal consent
Can I avoid probate?
Yes. Not all assets are subject to probate, and it is entirely possible to have an estate settled without requiring anyone to obtain an estate certificate or go through the probate process.
Assets that do not require probate
These are some of the assets that don’t require probate:
Jointly owned assets that have a right of survivorship
Insurance proceeds paid to a named beneficiary (not the estate)
RRSPs, RRIFs, and TFSAs that have a named beneficiary (not the estate)
Gifts made during the deceased’s life
Assets in a trust created during the deceased’s life
The court can only issue one certificate. When you file to be recognized as executor, court staff will search court records to see if anyone else has applied for the same certificate as you or whether anyone has objected to your application.
Who can apply for a Certificate of Appointment of Estate Trustee Without a Will?
If the deceased died with no Will, there are rules in Ontario regarding who can apply to be a trustee. The applicant must reside in the province. The rules also establish a priority on who can apply, generally beginning with the spouse, then common-law partner, and finally, children of the deceased.
What information do I need to file for a Certificate of Appointment of Estate Trustee Without a Will?
When you apply to the court for the certificate, you’ll need to bring the following with you:
The original, valid Will if one exists;
Any additional paperwork that revokes, changes, or explains part or all of the Will;
Proof of death, such as a death certificate or a court order; and,
Any necessary court forms related to the deceased’s assets and beneficiaries.
What do I do if I’m not sure there was a Will in Ontario?
If you’re not sure whether a valid Will represents the deceased’s wishes for their estate, you can contact the estates department for the Superior Court of Justice where the deceased person lived to find out if a Will was registered. You can also check with any Superior Court of Justice’s civil office to determine if anyone has filed for a certificate in the province.
You could also consider using an online Will registry service to see whether the individual registered their will that way.
It’s also a good idea to ask people the deceased trusted to find out if they know of a Will or its location. There is no central registry of Wills in Ontario, and Wills don’t need to be filed with either the court or the government.
Does it cost money to probate a Will?
Yes. In Ontario, the value of the estate determines the probate fees. The fees are also paid for by the estate. Fees related to probate and estate administration vary between the provinces.
The probate tax—or the Estate Administration Tax—is around 1.5% of the estate’s value, for everything above $50,000. That money is payable to the Ontario Ministry of Finance and paid when you submit the Application of a Certificate of Appointment of Estate Trustee. If you cannot pay at the time of filing, you can motion to pay the fees when you have access to the estate.
How is the amount of the Estate Administration Tax decided?
The estate fee (known before as a Probate Fee) is based on the total value of all assets that the deceased owned at the time of their death that will be part of probate.
Assets included in the tax
Real estate in Ontario
Bank accounts
Investments
Vehicles
Business interests
Goods
Intangible property
Insurance (if insurance proceeds are left to the estate
Assets not included in the fee
Assets from before death but not at the time of death (for example, an insurance policy that is going to a named beneficiary)
Joint assets with a right of survivorship (such as bank accounts or property)
Real estate owned outside of Ontario
CPP Death Benefit
Certain investments going to a designated beneficiary
Certain debts do not lower the estate’s value. For example, you cannot use the deceased’s credit card debts, lines of credit, or funeral expenses to lower the estate’s value overall and decrease the fees owed. A mortgage can be deducted from the value of any real property owned, however.
Payment is not due if no one applies for an estate certificate. If you applied for an estate certificate but did not receive one, your deposit is refunded to you.
Are there estates that don’t require fees?
As of January 1, 2020, the province has eliminated the tax for the first $50,000 of the value of an estate. For an estate valued at less than $50,000, no tax is due. You must still file an Estate Information Return within 180 calendar days following the issue of an estate certificate.
Certificates that don’t require estate tax
The estate tax isn’t charged if any of the following certificates are issued:
Certificate of Appointment of Succeeding Estate Trustee with a Will
Certificate of Appointment of Succeeding Estate Trustee with a Will Limited to the Assets Referred to in the Will
Certificate of Appointment of Succeeding Estate Trustee without a Will
Certificate of Appointment of Estate Trustee During Litigation
Understanding all the ins and outs of probate can be tricky, especially considering that requirements change between provinces and even between financial institutions. If you’re at all uncertain about whether the probate process is needed or worried about claims against the estate, you may want to consider speaking with an estate lawyer who can provide you with legal advice as to what you may need to do throughout the process, including naming an executor.
If you’re thinking about your estate and how it would one day be managed, consider looking into Epilogue’s online Wills. Our platform can help you navigate the complex world of estate planning and empower you to make decisions about the future.
