Estate Valuation for Probate in Ontario: What to Include

When you apply for a Certificate of Appointment of Estate Trustee, you must put a value on the estate, and the Estate Administration Tax depends on that number. Getting it wrong can mean paying too little or too much.

This article walks through what counts, what does not, and how to value common assets. If the estate includes a business or unusual property, talk to a lawyer or accountant.

What counts toward the estate value

The tax is based on the value of all assets the deceased owned at the time of death. That 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.

The value is rounded up to the nearest $1,000. Above the first $50,000, the tax is $15 for every $1,000.

For a certificate applied for on or after January 1, 2020, there is no tax on the first $50,000. For example, on a $240,000 estate the first $50,000 is taxed at $0 and the remaining $190,000 at $15 per $1,000, so the tax is $2,850. Using the same method, a $500,000 estate pays 450 × $15 = $6,750.

An estate worth $50,000 or less pays no tax, but if an estate certificate is issued, the estate representative must still file an Estate Information Return.

What is left out

For some 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. Certain property on a Reserve may be exempt.

How to value each type of asset

Assets are valued at fair market value on the date of death. Values must be supported by documents such as account statements or an appraiser's opinion.

• Real estate: use its appraised value on the date of death, even if it later sells for more or less. Mortgages, liens and similar encumbrances on that property can be subtracted from its value.
• Bank accounts: use statements showing the balance at death. Include accounts at foreign banks.
• Investments: use statements or other records showing value on the date of death.
• Vehicles and vessels: include them wherever located.
• A business: this is a complex asset, and a professional appraiser may be needed.

What you cannot deduct

Only mortgages, liens and similar encumbrances on real property can be deducted, and only from that property's value. Funeral expenses, legal fees, loans and interest, vehicle debt, credit card debt, lines of credit, unregistered loans and real estate commissions cannot be deducted from the estate value.

This surprises many trustees. An estate with large credit card debt still has its assets valued without that debt for tax purposes. The debts remain real obligations of the estate, but they do not reduce the Estate Administration Tax base.

Estimates, mistakes and what to do next

In some cases an applicant can pay tax on an estimated value that they swear or affirm in the application. They must undertake to file a sworn statement of the total value and pay any balance owing within six months after giving the undertaking. An applicant who cannot pay the tax when filing can ask a judge for an order to pay it later.

After the certificate is issued, you must file an Estate Information Return within 180 calendar days listing each asset and its date-of-death value. If you later find new assets, or learn that the return was incorrect or incomplete, you must file an amended return within 60 days of becoming aware of it, and any extra tax is then payable. Keep your records for four years.

Accuracy matters. A representative who fails to file the return, or who makes false or misleading statements, may be fined at least $1,000 and up to twice the tax payable by the estate, and may also face up to two years' imprisonment. The Ministry of Finance may assess or reassess the tax within four years after it became due, and at any time if a return was not filed or there was misrepresentation or fraud. The estate pays the tax, not the representative personally.

• List every asset and how it was held at death.
• Mark which items fall into an excluded category, and confirm the paperwork.
• Order an appraisal for real estate and any business.
• Collect statements showing date-of-death balances.
• Add up the mortgages and liens against each property, and deduct them only from that property's value.
• Ask a lawyer or accountant about anything unclear before you swear the application.

Frequently asked questions