Estate Administration Tax When Someone Dies Without a Will in Ontario

When someone dies without a will, families often wonder whether the estate is taxed differently. The tax itself is calculated in the same way. What changes is who may apply, which forms are needed and whether a bond is required.

This article walks through those differences in plain language. Every estate is different, so a lawyer can confirm how the rules apply to yours.

Is the tax different when there is no will?

The Estate Administration Tax is charged only when an estate certificate (probate) is applied for and issued. If no certificate is applied for or issued, no tax is owed. The tax is paid by the estate, not personally by the person acting as estate representative.

For certificates applied for on or after January 1, 2020, no tax is payable on an estate worth $50,000 or less. Above $50,000, the tax is $15 for every $1,000 (or part of $1,000) over $50,000. The estate's value is rounded up to the nearest thousand dollars first. Applications made before that date used older rates.

Who can apply when there is no will

Where there is no will, the deceased's spouse or common-law partner usually has the first right to apply. After them, a close adult relative (a child, parent, grandchild, sibling, or nephew or niece) can apply, and the court may appoint whichever relative it considers most appropriate.

The person appointed becomes the estate trustee. That role includes collecting the estate's assets, paying taxes, bills and other debts, and distributing the residue to those entitled to it.

Forms and the bond

Applications with or without a will use Form 74A (Application for a Certificate of Appointment of Estate Trustee). Without a will, Form 74G Part B, a consent to the applicant's appointment, is also needed. Form 74A asks for the total value of real property, the total value of personal property and the total estate value.

A bond is required when the person died without a will. It is also required when the applicant was not named as estate trustee in a will, or does not live in Ontario, another Canadian province or territory, or a Commonwealth country. The bond is generally double the estate's value unless a judge orders otherwise.

The tax is paid as a deposit when the application is filed. Once the certificate is issued, the deposit becomes the Estate Administration Tax.

What counts toward the estate's value

Assets are valued at fair market value at the time of death. Without a will, there are no beneficiary choices written into a will, but some assets still pass outside the estate and are left out of the value. Examples are insurance paid to a named beneficiary and jointly owned assets that pass automatically to the surviving owner.

• Included: Ontario real estate at its appraised value at death, less mortgages or liens registered against it.
• Included: bank accounts, investments, vehicles, business interests and other property wherever situated.
• Left out: RRSPs, RRIFs and TFSAs with a beneficiary designation or declaration.
• Left out: real estate outside Ontario and CPP death benefits.

Small estates and later corrections

Since April 1, 2021, a small estate for probate purposes is one valued at $150,000 or less. The application is Form 74.1A, filed with Form 74.1B, together with a draft Small Estate Certificate (Form 74.1C). Small estates still pay tax on the value over $50,000, up to the $150,000 cap. The return is due within 180 calendar days of receiving a Small Estate Certificate, even if the estate is under $50,000.

If new assets turn up in a small estate and the new total is still $150,000 or less, the estate can apply for an Amended Small Estate Certificate (Form 74.1E). If the total goes over $150,000, a Certificate of Appointment of Estate Trustee must be applied for instead.

• If information in a filed return is incorrect or incomplete, an amended return must be filed within 60 days of becoming aware of it, within four years of the certificate being issued.
• The Ministry of Finance may assess or reassess the tax within four years after the day it was due, but with no time limit if a return was late or a misrepresentation was made.
• A Notice of Objection to an assessment must be filed within 180 days from the day the Notice of Assessment was issued.
• Failing to file the return, or making false or misleading statements, may lead to a fine of at least $1,000 and up to twice the tax payable, imprisonment of up to two years, or both.

After the certificate: what to do next

The estate representative must file an Estate Information Return with the Ministry of Finance within 180 calendar days after the certificate is issued. This is required even when the estate is worth $50,000 or less and no tax is owed. Filing online is recommended. Keep the records supporting the return for four years.

• Confirm who has the right to apply, starting with a spouse or common-law partner.
• Gather asset statements and an appraisal of any real estate.
• Prepare Form 74A and the consent on Form 74G Part B.
• Ask a lawyer about the bond and how it applies to you.
• Diarize the 180-day return deadline.

Frequently asked questions