Valuing Estate Assets for Probate in Ontario: Real Estate, Investments, and Hard-to-Value Property

One of the most practically demanding tasks an Ontario executor faces is determining the value of the estate — not in a rough sense, but with enough precision to satisfy the court, pay the correct Estate Administration Tax, and file an accurate Estate Information Return with the Ministry of Finance. Get the valuation wrong and the executor risks penalties, a ministry audit, or personal liability.

Valuing estate assets for probate requires understanding what standard applies, which assets to include, and when a professional appraisal is necessary versus when a reasonable estimate will do.

The Valuation Standard: Fair Market Value at the Date of Death

Ontario requires the estate trustee to report the fair market value of each estate asset as of the date of death. Fair market value is generally defined as the price a hypothetical willing buyer would pay a hypothetical willing seller, both acting at arm's length and with reasonable knowledge of the relevant facts.

This standard has two important implications:

1. Historical cost is irrelevant. What the deceased paid for an asset — even recently — is not the probate value unless it happens to equal current fair market value.
2. Sentimental value is irrelevant. A family heirloom is valued at what someone would pay for it, not what it means to the family.

Real Property (Land and Buildings)

Real estate is usually the most significant asset in an Ontario estate. For probate purposes, the relevant value is the fair market value of the deceased's interest in the property as of the date of death.

What to use

• Professional appraisal by a designated or accredited real estate appraiser: the most defensible evidence of value, and strongly recommended where the property value is substantial or unusual.
• Realtor's comparable market analysis (CMA): an estimate of fair market value based on recent comparable sales. Less formal than an appraisal but commonly accepted for many purposes; put it in writing.
• Municipal property tax assessment: generally not an accurate reflection of current fair market value. MPAC assessments are based on mass appraisal models with a legislated valuation date, which may differ significantly from the current market. Do not use the assessed value without expert guidance.

Important considerations

• If the property was held as joint tenants, it passes by right of survivorship and is not included in the probate estate value.
• If it was held as tenants in common, include only the deceased's proportionate share.
• Properties with environmental issues, encumbrances, or development restrictions may require specialized appraisals.

Publicly Traded Securities

For stocks, bonds, ETFs, and mutual funds listed on public markets, the valuation is more straightforward:

• Use the closing price on the date of death for each security.
• For accounts, confirm the value with the financial institution as at the date of death — they can usually provide a statement of account value as of a specific date.
• Registered accounts (RRSP, RRIF, TFSA) with a named beneficiary are not included in the probate estate.

Where the date of death falls on a weekend or holiday when markets are closed, practitioners typically use the last available closing price before the date of death or the first price on the next trading day — verify current practice with a professional.

Private Company Shares and Business Interests

This is where valuation becomes genuinely complex. There is no public market for shares in a private corporation, and value depends on factors like:

• The company's earnings, cash flow, and assets
• Industry comparables
• Whether the deceased held a controlling or minority interest (minority interests are often discounted)
• Shareholder agreements that may restrict or dictate the value of shares

A business valuator (typically a CPA with a Chartered Business Valuator designation) should be engaged for any significant private company interest. Attempting to self-report a private company value without professional support invites Ministry scrutiny.

Personal Property

Vehicles

Use the Canadian Black Book or similar guide for the date of death, adjusted for actual condition. Dealer quotes are also acceptable.

Jewellery, Art, and Collectibles

Items of significance — fine jewellery, original artwork, antiques, coins, wine collections — should be appraised by a certified appraiser in the relevant specialty. A reasonable estimate for routine household items is generally acceptable; for high-value items, a formal appraisal is prudent.

Household Contents

Most household furniture and personal effects are worth far less than families expect. A general estimate based on what the contents might realistically fetch at auction or a private sale is usually sufficient unless specific items are known to be valuable.

Cash, Bank Accounts, and GICs

• Bank balances: confirm the exact balance as of the date of death with each financial institution.
• GICs and term deposits: use the principal balance plus accrued interest to the date of death.
• Foreign currency: convert at the exchange rate on the date of death.

Amounts Owed to the Estate

If anyone owed money to the deceased at the time of death — a personal loan, a mortgage held by the deceased, deferred proceeds from a sale — that receivable is an estate asset and should be included at its face value (or a discounted value if there is doubt about collectibility).

Debts Are Not Deducted

This surprises many executors: the EAT is calculated on the gross estate value, not the net value. Outstanding mortgages, credit card balances, car loans, and other debts of the deceased are not subtracted from the estate value for probate and EAT purposes. The estate pays the EAT on the gross, then pays debts from the remaining assets.

Frequently asked questions