How an Executor Values Property at Date of Death in Ontario

As an executor, you will be asked for values again and again: by the court, by the Canada Revenue Agency, by financial institutions and by the beneficiaries. The value of a house or a share portfolio on the day of death can affect tax, fees and whether everyone feels the estate was handled fairly.

This article explains which values you need, where they are used and how to decide who to hire. For large or unusual assets, speak with a lawyer or accountant before settling on a figure.

Why the date of death matters

Estate Administration Tax is charged on the value of the estate as of the date of death, and the return must report the total value of real property and personal property owned by the deceased at death. For applications made on or after January 1, 2020, there is no tax on an estate worth $50,000 or less, and above that the tax is $15 for every $1,000 (or part) of value, rounded up to the nearest thousand.

For income tax, capital property is deemed disposed of just before death at fair market value, reported on Schedule 3 of the final return. A later sale by the estate is taxed on the sale price less the fair market value reported on the final return. A well-supported date-of-death value therefore helps avoid paying tax on growth that happened before death.

Which values you need to record

Life insurance depends on how the policy is set up. If no beneficiary is named, the insurer assumes the estate is the beneficiary, the benefit passes under the will and creditors may claim it.

Who to hire for which asset

There is no single valuer for everything. As a general guide, match the professional to the asset and ask for a written report that states the valuation date as the date of death.

• Real estate: a qualified real estate appraiser who can value the property as of the date of death, even if that was some time ago.
• Bank, investment and registered accounts: the institution can usually provide a statement or letter showing balances at death.
• Private company shares or a business: a business valuator, often arranged with the accountant.
• Art, jewellery, collectibles, vehicles: an appraiser who deals with that type of item.
• Household contents: often a modest estimate or a short appraisal, depending on value and whether an item is specifically left to someone.

Ask each professional whether their report can be shown to the court, the tax authorities and beneficiaries. Ask about cost before they start.

Records, accounts and fairness

Keep the records supporting the Estate Information Return for four years. If you are later asked to explain a number, you will want the appraisal, the statement or the email that supports it.

Valuations also matter if you need to pass your accounts. The estate trustee files accounts verified by affidavit, and interested persons can serve a notice of objection. The court fee is $432 for an estate trustee's application to pass accounts and $93 for a notice of objection. Clear values make it easier to show beneficiaries that assets were handled properly.

If you want to be paid for your work as executor, do not take compensation without proper authority. Pre-taking is allowed only with agreement of all persons with a vested or contingent interest (if capable adults), with court approval, or if the will provides.

What to do next

• List every asset the deceased owned and note whether it passes through the estate.
• Request date-of-death statements from banks, brokers and insurers.
• Book a real estate appraisal with a valuation date of the date of death.
• Ask your accountant about Schedule 3 and the fair market value reporting on the final return.
• Get a business or specialty valuation for anything unusual.
• Store reports and statements together, and keep them for at least four years.

If a value is uncertain and the estate must move forward, speak with a lawyer about whether an estimate is acceptable and how to correct it later. An estimate that is later replaced by the actual value generally calls for an amended return within 60 calendar days after the actual value is given to the court.

Frequently asked questions