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Standard Life | Probate Process

Changes to the probate process in Ontario

Ontario’s probate fees are governed by the Estate Administration Tax Act, 1998 (“EATA”). The 2011 Ontario Budget contained several measures to improve the administration of Ontario’s tax system. Advisors and others involved in the estate planning area may not necessarily have taken note of these changes.

Probate fees are currently administered by Ontario’s Ministry of the Attorney General. With the new legislation, the administration of this tax will shift to the Minister of Revenue. Provisions of Ontario’s Retail Sales Tax Act will govern the procedures for assessments and reassessments, objections and appeals, administration and enforcement.

An application for probate will generally be “open” (that is, subject to possible audit and reassessment) for four years from the date it is made. For example, an application filed on January 1, 2013 could be audited and reassessed any time until January 1, 2017. (There are no time limits when there is a failure to comply, fraud or misrepresentation.) New provisions provide for fines and imprisonment for certain types of non-compliance.

Practitioners in this area are awaiting the release of the regulations dealing with what is referred to as “prescribed information” about the deceased. Some suggest that there will be an increased need for valuations, etc. If this is the case, the probate process will not only become more costly, there will be time delays.

Under the EATA, the probate fees are $5 per $1,000 for the first $50,000 of assets falling into the estate, and $15 per $1,000 for assets in excess of $50,000. These fees can be avoided by naming beneficiaries in insurance policies.

With appropriate planning, and a designated beneficiary, assets will pass outside the estate. Insurance policies include segregated fund contracts, life insurance policies, critical illness insurance policies, and annuity policies (including term fund, life and term certain policies).

Full article with case study

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