Do You Need Probate in Ontario? Assets That Can Skip It

A bank will not release an account, a house cannot be sold, or an investment firm asks for paperwork you do not have. At that point many families wonder whether probate is required at all, or whether they can avoid it.

The honest answer is that it depends on how each asset was held. This article explains the main categories, how small estates are treated, and what can still apply even when probate is not needed.

What probate means in plain words

Probate is the court process that confirms an estate trustee's authority to deal with the deceased person's assets. The court issues an estate certificate, and institutions often want to see it before they hand over money or transfer property.

Probate is usually needed for real property that does not pass by survivorship and for assets held by financial institutions. That is why a bank account in the deceased's sole name or a house held alone commonly leads to an application.

Assets that can pass outside the estate

Some assets pass outside the estate, either by joint ownership with survivorship or to a designated beneficiary. Whether a particular asset can be released without a certificate depends on how it is set up and on what the institution holding it requires, so it is worth confirming with the institution or a lawyer.

• Property held jointly with a right of survivorship, which passes to the surviving owner.
• Assets with a designated beneficiary, which go to the person named.
• Plan benefits such as an RRSP, RRIF or pension, where the participant named a person by a signed instrument or by will.

Be careful with later wills. A revocation clause in a will revokes an earlier designation made by instrument only if it relates expressly to that designation.

Joint accounts and family disputes

Not every joint account is a true gift of survivorship. Whether the survivor keeps the money or holds it for the estate depends on the facts, and the bank documents alone do not decide it. Courts look at things like the wording of the bank documents, who controlled and used the funds, any power of attorney and how the account was treated for tax.

Assets outside the estate can still matter in a dependant's support claim. For that claim only, joint accounts, joint tenancy property, life insurance owned by the deceased and beneficiary designations are treated as part of the estate. If you think this may affect you, get advice before money is distributed.

Small estates and what still has to be filed

Since April 1, 2021, a small estate for probate purposes is one worth $150,000 or less. It uses Form 74.1A (Application), Form 74.1B (Request to File) and Form 74.1C (Draft Small Estate Certificate).

For applications made on or after January 1, 2020, no Estate Administration Tax is payable on estates worth $50,000 or less. Above that, the tax is $15 for each $1,000 or part of $1,000 by which the estate exceeds $50,000.

Exception: even when no tax is payable, the Estate Information Return must still be filed within 180 calendar days of receiving the certificate, including a Small Estate Certificate. The 180-day rule applies even if the estate is worth $0. If no certificate is issued, no tax is owed and the deposit is refunded.

Other points to know before you apply

• If the deposit was based on an estimated value, an undertaking is required, followed by a sworn statement of the actual value and payment of any extra tax within six months after the undertaking.
• If the Estate Information Return turns out to be wrong or incomplete, an amended return is due within 60 days of finding out.
• A bond is required when there was no will, when the applicant was not named as estate trustee, or when the applicant does not live in Ontario, another province or territory, or a Commonwealth country. It is generally double the estate's value unless a judge orders otherwise.

A judge may, in special circumstances, reduce the bond or dispense with it.

What to do next

• List every asset and note how it is held: sole name, joint, or with a named beneficiary.
• Ask each bank or investment firm in writing what it requires before release.
• Collect any beneficiary designations for registered plans and insurance.
• Estimate the estate's total value to see whether the small estate route or the tax threshold may apply.
• Speak to a lawyer if a joint account, a missing designation or a family disagreement makes ownership unclear.

Frequently asked questions