Do You Need Probate to Settle an Estate in Ontario?

When someone dies, a family member is often told by a bank or a land registry office that they need "probate" before anything can be done. That can feel like a hurdle, and many people wonder whether it can be avoided.

The honest answer is that it depends on what the person owned and how it was held. This article explains which assets usually need probate, which pass outside the estate, and what changes for smaller estates in Ontario.

What probate actually does

In plain terms, probate is the court process that results in an estate certificate. The certificate confirms who has authority to deal with the deceased person's assets. Banks and land registry offices ask for it because they want proof that the person asking for the money or property is the right one.

Whether you need it is not decided by the size of the estate alone. It is decided mostly by the type of asset and by how that asset was owned or designated.

Assets that usually need probate and assets that do not

Some assets pass outside the estate, by joint ownership with survivorship or to a designated beneficiary. Probate is usually needed for real property that does not pass by survivorship and for assets held by financial institutions.

Joint bank accounts need care. A gratuitous transfer from a parent to an adult child, including into a joint account, is presumed to be held on a resulting trust for the parent's estate, but that can be rebutted by evidence that the parent intended a gift. For a transfer to a minor child, the starting point is instead a gift. Courts look at things like the bank documents, who controlled and used the funds, and how the account was treated for tax.

Smaller estates and estate tax

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.

Paying no tax does not end your filing duties. The Estate Information Return must still be filed within 180 calendar days of receiving the certificate, and that includes a Small Estate Certificate. If the deposit was based on an estimated value, the applicant must give an undertaking, then file a sworn statement of the actual value and pay any extra tax within six months after giving the undertaking.

Who applies, and what a bond means

If there is no will, the spouse or common-law partner usually has the first right to apply. If there is none, a close adult relative (child, parent, grandchild, sibling or nephew/niece) can apply.

A bond is required when the deceased died without a 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 value of the estate unless a judge orders otherwise. In special circumstances a judge may reduce the bond or dispense with it.

What to do next

• List every asset and note how each is held: sole name, joint, or with a named beneficiary.
• Ask each bank or institution in writing what it requires before releasing funds.
• Note the dates that apply once a certificate is issued, including the 180-day filing for the Estate Information Return.
• Do not distribute assets until tax is dealt with: a representative who distributes without a CRA clearance certificate (Form TX19) while tax is owing is personally liable, up to the value of the assets distributed.

If the picture is unclear, for example a joint account with an adult child or a mix of assets, a lawyer can confirm what applies before you spend time or money on an application.

Frequently asked questions