Which Assets Are Exempt From Probate Fees in Ontario?

People often call Ontario's Estate Administration Tax "probate fees". It is charged on the value of the estate, so assets that pass outside the estate can reduce it. Knowing which ones do is useful when you are estimating what an estate will owe.

This article lists the main assets left out of the calculation, the assets that are included, and the traps. Because ownership and paperwork can be more complicated than they look, it is worth having a lawyer or accountant confirm how the rules apply.

What is counted in the first place

The tax is based on all assets the deceased owned at the time of death. This includes Ontario real estate (less mortgages or liens on it), bank accounts including foreign banks, investments, vehicles and vessels wherever located, property held in another person's name, business interests, and insurance paid to the estate.

For certificates applied for on or after January 1, 2020, there is no tax on the first $50,000. Above that, the tax is $15 for every $1,000, or part of $1,000, which is 1.5%. A $500,000 estate, for example, pays 450 x $15 = $6,750.

Assets that are left out

If a registered plan has no beneficiary designation, it is included in the estate value. Checking the designation on each plan is one of the most useful steps.

Traps to watch for

• A joint account is not automatically exempt in every case. When a parent puts money in a joint account with an adult child without payment, the law presumes the child holds it in trust for the parent's estate, unless evidence shows the parent intended the child to have the right of survivorship.
• For gratuitous transfers from a parent to a minor child, the starting point is instead the presumption that the transfer is a gift.
• Insurance paid to the estate is counted. How any other insurance policy is treated depends on your situation, so it is worth confirming with a lawyer or accountant.
• Only joint assets that pass automatically to the survivor are excluded. Other ownership arrangements can be different, so ask before assuming.

Mortgages and liens on real property can be deducted from that property's value, but funeral expenses, legal fees and credit card debt cannot be deducted from the estate value.

Cases where no tax or no certificate is involved

Estates worth $50,000 or less pay no tax, but if an estate certificate is issued, an Estate Information Return must still be filed. Some certificates, such as a Certificate of Appointment of Estate Trustee During Litigation and a certificate for a succeeding estate trustee, require neither tax nor the return.

For certain limited certificates, such as those limited to the assets covered by one will, or resealing cases, only the assets within that certificate's scope are counted.

An estate valued at $150,000 or less can use the simplified Small Estate Certificate process, though estates over $50,000 and up to $150,000 still pay the tax when the application is filed.

What to do next

• List every asset the deceased owned and how each was held.
• Check each RRSP, RRIF, TFSA and pension for a beneficiary designation.
• Identify joint assets and confirm whether they pass automatically to the survivor.
• Gather date-of-death values with supporting documents, since values must be supported.
• Remember the Estate Information Return is due within 180 calendar days after the certificate is issued, even if the estate value is $0.
• Speak with a lawyer or accountant about unclear joint accounts or complex assets.

Frequently asked questions