When a person dies, all of his or her assets become part of his or her estate. This can include a house, bank accounts, investments or personal possessions. Estate administration is the process where assets and debts of an estate are located and distributed to one or more beneficiaries according to the terms of the Will or, if the deceased person did not have a Will, as set out in the Succession Law Reform Act. The individual responsible for administering the Estate is called the “Estate Trustee” or the “Executor.” In order to sell the deceased’s assets and distribute them to the beneficiaries, it is often necessary to bring an Application to Court to obtain a Certificate of Appointment of Estate Trustee.
Our probate and estate lawyers will work closely with you and guide you through your duties and responsibilities as executors of a will or provide information where a person died without having a will in Ontario. Clients will be comforted by the knowledge that if complications arise, they will have the support of a firm with experience in estate planning and family law. You can count on our lawyers to be your advisors and advocates throughout this process to help eliminate the need for costly and complex litigation.
We frequently hear similar questions from clients about the probate process. Below we answer some of the most common of these and provide some helpful guidance.
In the event a loved one dies, a member or representative of the family will go through a legal process known as probate or obtaining a Certificate of Appointment of Estate Trustee. A court will grant this person the authority to act as the Estate Trustee of the deceased’s estate. In addition to these important roles, the probate process will also officially recognize the last will and testament of the deceased if the deceased had a Will. If the deceased died without a will, we will work with the family to determine who should apply to act as the deceased’s Estate Trustee.
Probate is not always necessary and not all executors will have to go through this process. Our lawyers will help you determine if a court application is truly necessary.
Circumstances that typically determine the need for probate include:
- Validation of a will by a court
- No designation of an executor
- There is a dispute over who is executor
- Legal consent by beneficiaries in the will is not possible
- An executor needs proof of their authority to handle matters of the estate, for example, land transfers, transfer of investment accounts or car titling.
Historically, many people would receive monthly statements mailed to their home and so it was just a matter of waiting a month after the person died and you would know where they had their investments and bank accounts. Most people no longer get paper statements and, as a result, it has become more common for bank and investment accounts to go unclaimed after someone’s death. It is the responsibility of the executor to locate all assets of the decease’s estate, which can be a time-consuming task. Our experienced estate lawyers will assist you in locating all of your loved one’s bank and investment accounts. Depending on your unique circumstances, we will provide you with the necessary guidance and advice when a paid search is warranted.
The length of time it takes to complete the probate process depends on the completion of several steps, the first of which is the collection of documentation for the probate application. Gathering all the necessary paperwork to complete this step can take some time, especially if no will is located.
Relevant documents will include:
- Proof of death
- Will of the deceased (if one exists)
- List of the deceased’s known assets
- List of the deceased’s known debts
- Addresses and telephone numbers for all persons named in the Will
- Name and addresses of all persons closely related to the deceased if there is no Will
- Confirmation of marital status (marriage certificate, divorce certificate)
After the application is complete, our firm will file it with the Ontario Superior Court of Justice in the city where the deceased lived. The Court may take anywhere from three months to a year to get it processed, possibly longer if there are any disputes surrounding the estate. After obtaining probate, the executor can begin administering the estate and generally has a year to complete this process though there are a few exceptions under different circumstances.
Probate fees (also known as Estate Administration Tax) are calculated on the value of the estate probated. Fees are calculated based on the total valuation of assets belonging to the deceased at the time of their death at the rate of $15 for every $1,000 after the first $50,000. For example, an Estate Tax of $8,250.00 is payable on an Estate valued at $600,000. The Estate Tax is payable at the time that the Application is filed in Court.
Common assets that are subject to probate taxes could include:
- Owned property within Ontario
- Bank accounts
- Investment accounts
Assets outside of the estate, such as life insurance payouts to named beneficiaries or jointly owned property passed by survivorship, generally fall outside of this taxation. In cases where probate is necessary, payment of these fees comes directly from the estate before the distribution of assets to the beneficiaries.
If the Deceased had sufficient funds in their bank accounts, you can take the account from the funeral home to the Deceased’s bank and the bank will usually provide you with a money order, made payable to the funeral home to pay for the expense. Likewise, the bank will normally provide the Executor with a money order, made payable to the Minister of Finance, upon being provided with a letter from your lawyer confirming that this money is payable from the Estate.
If the Deceased did not have sufficient money in their bank account to cover the funeral and/or probate fees, then someone in the family will hopefully be able to assist and lend the money to the Estate. Upon money becoming available (RRSPs cashed in, sale of property, etc.), the money is then immediately returned to the family member.
You can sometimes list the house for sale before you get the Certificate, but you would not be able to close the transaction. Our estate lawyers will provide you with the relevant information so that you can list and sell the deceased’s house on a timely basis.
The common-law spouse often does have rights to part of the Deceased’s Estate, although the rights are often different than that to which a spouse who was married would be entitled. Conflict often arises among common-law spouses and adult children from previous relationships. It is crucial that the common-law spouse and the adult children obtain independent legal advice to know their rights and obligations.
Anyone who receives a certificate of appointment of estate trustee (Estate Certificate) must file an Information Return with the Ontario Ministry of Finance. The Information Return must be received 90 calendar days after an Estate Certificate is issued. Our estate administration team will assist you in completing and filing the Estate Administration Return and with filing additional documents in Court, where necessary.
Our estate lawyers have a working relationship with lawyers in other jurisdictions, including Portugal and Great Britain to help you deal with the foreign-owned assets of the deceased. Each foreign jurisdiction has their own laws and so it is key to obtain information about the laws of the foreign country on a timely basis.
The executor must normally file two tax returns for the deceased. The first will reflect the period of the year the deceased was living, and the second return (called the final return),will address additional taxes payable by the Estate, such as redeeming RRSPs/RRIFs and capital gains. Once complete, it is vital to have the Canada Revenue Agency (CRA) issue a Clearance Certificate to confirm the final assessment. Not doing so puts an estate at risk for further tax liabilities that could affect final distributions. For this reason, we typically recommend that the final distribution of the estate not be made until the executor has received the Clearance Certificate from the CRA.
- No will at death
- Estate disputes
- Infant beneficiaries
Cases requiring an executor will need someone to apply for an estate certificate with the Ontario Superior Court of Justice to take on the responsibility of administering the estate.
Yes! Administering an Estate can be very time-consuming and stressful. As payment for the work involved, you are generally entitled to compensation. The executor’s compensation will be based on a variety of factors including the size of the estate, difficulty level and time spent administering the estate. You can also claim reimbursement for your expenses including legal costs and out-of-pocket expenses provided they are reasonable and properly incurred. Our estate lawyers will provide you with guidance and check-lists to assist you in keeping track of the time spent on estate administration duties. We will also assist the Estate Trustee in bringing a Court process to allow the Estate Trustee to take compensation for all of their work.