Survivorship and Estate Applications: Do You Still Need Probate?

After a death, many people hear two different things: that jointly owned property avoids probate, and that probate is needed to deal with everything else. Both can be true for the same family.

This article explains how a survivorship application differs from an estate application, when an estate trustee still needs a certificate, and what the tax consequences are. It is general information, not advice on your file.

Two routes for two kinds of assets

Ontario says the assets in an estate are distributed depending on how they are owned. Money and property jointly owned with another person, and designated-beneficiary assets, are examples of assets that follow their own route.

If you own property as a joint tenant, it passes automatically to the surviving owner. Property that does not pass by survivorship goes to the deceased's personal representative. That split is why a single death can involve both a survivorship application and an estate application.

When probate is still needed

Ontario says probate is not always required. It is normally required if the deceased owned real property or assets held by a financial institution. Reasons to apply include there being no will, an institution demanding proof of authority, real property that must be sold, disputes, or beneficiaries who cannot consent.

Real property that does not pass by right of survivorship is also a reason to apply. So, if the deceased owned a home alone, or as a tenant in common, probate is likely to be part of the picture.

• Estates valued up to $150,000 can apply for a Small Estate Certificate.
• Estates above $150,000 apply for a Certificate of Appointment of Estate Trustee.
• Without a will, the spouse or common-law partner generally has first right to apply, then a close adult relative such as a child, parent, grandchild, sibling, nephew or niece.

Estate Administration Tax and the filing deadline

For estate certificates applied for on or after January 1, 2020, the tax is $15 for every $1,000, or part of $1,000, of estate value over $50,000. Estates of $50,000 or less pay no tax but must still file the return.

The tax is due the day the estate certificate is issued, and an Estate Information Return must be filed within 180 calendar days after issue, even if the estate is worth $0.

When valuing the estate, the exclusions matter. Jointly owned assets that automatically become the other owner's are left out, as are insurance and registered plans such as RRSPs, RRIFs, TFSAs and RPPs with a beneficiary designation, and real estate outside Ontario. Keep records of how each asset was held, since this affects the tax.

Spouses, the Family Law Act and timing

Survivorship is not always straightforward. If a spouse dies owning a family residence as a joint tenant with a third party who is not their spouse, the joint tenancy is deemed severed immediately before death under s. 26(1) of the Family Law Act, according to a land registry bulletin. The property then does not pass by survivorship.

For deaths on or after March 1, 1986, a survivorship application must include a Family Law Act statement signed by a solicitor. For estates, land registry practice says no distribution of a deceased spouse's estate may be made within 6 months of death without an executor's statement of no surviving spouse, a court order, or the surviving spouse's written consent.

Common-law partners are treated differently from married spouses. A common-law spouse does not inherit under the Succession Law Reform Act on an intestacy. Whether jointly owned property passes to a common-law partner depends on how it was held. If it was held as a joint tenant, it passes to the surviving owner automatically.

What to do next

• List every asset and note how it was held: sole name, joint, or with a named beneficiary.
• Search for a will, and note whether there are disputes or beneficiaries who cannot consent.
• Ask whether any institution is demanding proof of authority before releasing funds.
• Separate assets that pass by survivorship from those that do not.
• Speak with an Ontario lawyer before distributing anything, especially if a spouse or a third-party co-owner is involved.

Frequently asked questions