Does putting my assets in an alter ego trust let me avoid Ontario probate tax?

Yes, that's one of the main reasons people over 65 use an alter ego trust. It's a trust you create during your lifetime and fund with your own property on a tax-deferred rollover basis, on the condition that only you can receive any of the income or capital from it while you're alive. Because assets held in the trust are owned by the trust rather than by you personally at death, they don't form part of your estate and generally don't require a certificate of appointment to transfer, which means they're also excluded from the value Ontario's Estate Administration Tax is calculated on.

The trade-off is that you give up direct personal ownership of whatever you transfer in, and the trust itself faces its own tax consequences down the road, including an eventual deemed disposition. It also doesn't help with income tax generally, only with the specific probate-tax and probate-process benefits, and it works best for assets that would otherwise clearly require probate, like investment accounts or real estate, rather than everything you own.

Because the age requirement, the funding rules, and the ongoing tax treatment all have to line up correctly, this should be set up with tax and estate planning advice specific to your situation.