Who Pays Probate Fees and Funeral Costs in Prince Edward Island?

If you are the executor, one of the first worries is money: the court fee to apply for probate, the funeral home invoice, and whether any of it comes out of your own pocket. It is a fair concern, because the first costs often come up before you know how the estate's money will be handled, and how that works depends on your situation, so it is worth confirming with a lawyer.

This article explains how probate fees are worked out in Prince Edward Island, what is left out of the calculation, and how to approach funeral costs, tax and getting repaid. Some points depend on the details of the estate, so they are flagged for you to confirm.

This article covers the law of Prince Edward Island.

How probate fees are worked out

An application for probate or letters of administration is made to the Supreme Court's Estates Section by petition under Rule 65 (Estates of Deceased Persons). Probate fees are not a flat charge. Under the Probate Act, they are scaled to the probate value of the estate.

Probate value means the gross assets of the estate, not including life insurance money passing on death to a named beneficiary. The fee schedule starts at $50 for a petition where the probate value is up to $10,000 and $100 for $10,001 to $25,000, rising in bands above that. Because the higher bands should be checked against the current Act, ask the Estates Section or a lawyer for the exact amount for your estate.

What is left out of the fee calculation

Life insurance paid to a named beneficiary is excluded from probate value, so it does not increase the probate fee. That money goes to the beneficiary directly and is not part of the base the fee is measured on.

• Gross assets of the estate count toward probate value.
• Life insurance passing to a named beneficiary does not count.
• Other court filing fees generally follow the Court Fees Act and its regulations.
• Costs on a passing of accounts are fixed under the Probate Act schedule.

Funeral costs and getting reimbursed

Funeral bills are usually the first expense, and they often arrive before the estate has any accessible money. Whether you are repaid, and from which assets, depends on what the estate holds and how it is set up. A lawyer or accountant can confirm the approach for your situation.

If you pay a bill personally, treat it as something to document carefully. That makes it much easier to ask for repayment from the estate later and to show beneficiaries what was spent.

• Keep every invoice and proof of payment.
• Pay from your own funds only if you understand how you will be repaid.
• Ask the funeral home whether it will wait for the estate to be settled.
• Record each payment with the date, amount and reason.
• Keep funeral receipts together with the estate records.

Taxes and the final return

Whether funeral costs are deductible on the final return is a tax question that depends on the facts, so raise it with an accountant instead of assuming. What is certain is that the final return has deadlines. The final T1 return is due April 30 of the following year if death occurred January 1 to October 31; if death occurred November 1 to December 31, it is due six months after the date of death. Any balance owing is payable by the same date unless noted otherwise.

There are exceptions. If the deceased or their spouse or common-law partner carried on a business, the final return is due June 15 for deaths January 1 to December 15, though the balance is still due April 30, or six months after death for deaths December 16 to 31. If the person died early in the year before filing the prior year's return, that return is due six months after the date of death.

As legal representative, you should also determine whether a CRA clearance certificate is needed before distributing any property of the estate. How this applies to the estate you are handling depends on your situation, so it is worth confirming with a lawyer.

What to do next

Start by collecting the paperwork you will need. A death certificate comes from the Vital Statistics Division, and a certificate showing cause of death is restricted to certain relatives such as a spouse, child, parent or sibling. The petition itself must state the date of death, the deceased's marital status, and the name, age and address of each child.

• Order death certificates from the Vital Statistics Division.
• List the estate's assets, excluding life insurance paid to a named beneficiary, to estimate probate value.
• Confirm the exact probate fee with the Estates Section.
• Keep a running record of every estate expense you pay.
• Ask an accountant about the final return and whether a clearance certificate is needed.
• Speak to a lawyer before paying large bills personally or distributing anything.

Frequently asked questions