Dealing with the loss of a loved one is a challenging time, and handling their estate may add legal and financial complexities. The process of probate in Ontario is an essential legal procedure, but it can often be intricate, especially if the estate is large or involves significant assets. Hiring an estate lawyer can streamline the probate process, ensuring that the estate is settled smoothly and efficiently.
What is Probate?
Probate is the court-supervised procedure granting the executor/executrix (or estate trustee) the authority to manage and distribute the deceased’s assets according to the will. This legal process also confirms the validity of the will. If no will is available (known as ‘intestacy’), the Court appoints an estate trustee, usually a close relative who has volunteered for this role, to handle the estate.
When is Probate Required in Ontario?
In Ontario, probate is necessary in cases where:
- Real property (such as a house) is part of the estate.
- The estate includes significant assets managed by financial institutions, exceeding 50,000$.
- A financial institution or third party requires proof of the executor’s authority to handle the deceased’s assets.
However, probate is not necessary when all assets are held jointly with another person, such as jointly owned bank accounts or jointly held property with a surviving spouse. In these circumstances, the other person automatically becomes the owner of whatsoever was jointly owned with the deceased individual.
How the Probate Process Works
The probate process involves several steps:
- Application Preparation: The executor prepares and submits a probate application, which includes the original will, proof of death (such as a death certificate), and other essential court forms.
- Valuing the Estate: Determining the total value of the estate’s assets is critical because probate fees—also known as the Estate Administration Tax—are based on this value. Assets considered in this valuation include real estate, personal property, and financial accounts.
- Filing the Application: Once prepared, the probate application is submitted to the Ontario Superior Court of Justice in the city where the deceased lived. A 243$ court filing fee charged at this point.
- Estate Administration Tax a.k.a. ‘Probate Fees’: In addition to the filing fee, a cheque for ‘probate fees’ must accompany the application. As the actual name implies, this is a tax on the value of the entire estate of the deceased person. The tax is calculated in a rather intricate manner:
- If the total value of the estate is less that 50,000$, no probate fees are charged
- If the total value of the estate is greater than 50,000$, the probate fees are calculated at 15$ for each 1,000$ over 50,000$. This means, 50,000$ is subtracted and not taxed; the remainder is subject to this calculation.
- Sidebar: Did you notice the acronym for the Estate Administration Tax is E.A.T? A tax takes the first ‘bite’ into the estate is the deceased. 😏
- Awaiting Court Approval: After the application is submitted, filing and probate fees paid, the Court reviews the application. When approved, the Executor receives a Certificate of Appointment of Estate Trustee. Only after receiving this certificate can the executor/executrix/estate trustee distribute the estate’s assets and pay off any outstanding debts. Companies and financial institutions require this certificate; for instance, the bank will require this certificate before releasing funds and closing the accounts of the deceased.
How an Estate Lawyer Eases the Probate Process
Probate applications require meticulous attention to detail. Estate lawyers offer valuable assistance throughout this process, helping to:
- Ensure Accurate Document Completion: Probate applications include complex forms. Errors can lead to delays or even rejection. An estate lawyer can complete the necessary documentation accurately. Lengthy delays occur when the court has to return incomplete or inaccurate applications for corrections.
- Calculate Estate Value and Taxes: Estate valuation is a critical aspect of the probate process, impacting the Estate Administration Tax. A lawyer obtains accurate valuations for all assets to ensure compliance with provincial regulations.
- Manage Potential Disputes: Estate disputes can arise over numerous issues, including the validity of the will or executor appointments. An estate lawyer may not only provide mediation to resolve disputes without going to court, but also may represent the estate in court, to resolve conflicts.
- Guide Executors Through Legal Nuances: The probate process requires additional legal steps, such as notifying all beneficiaries or addressing debt obligations. An estate lawyer ensures these steps are managed properly, avoiding legal repercussions.
Avoiding Common Probate Pitfalls
Many executors encounter complications that may delay estate settlement, such as incomplete forms or unanticipated taxes. An estate lawyer’s expertise can reduce these risks by:
- Verifying Asset Ownership: Not all assets are subject to probate. For instance, joint accounts with right of survivorship, assets with beneficiary designations (like RRSPs and TFSAs), and insurance policies paid to a named beneficiary bypass probate.
- Handling Complex Estates: Larger or more intricate estates, especially those with multiple real estate holdings, international assets, or complex debt arrangements, benefit from a lawyer’s insight to navigate the additional legal obligations.
- Updating Executors on New Probate Rules: Estate laws in Ontario change periodically. For example, recent changes removed probate fees for the first $50,000 of estate value. A lawyer stays updated on these rules and can advise executors accordingly.
How Long Does Probate Take in Ontario?
Probate duration can vary depending on the estate’s complexity and any disputes that arise. Generally, a probate application can be processed within a few months. Some estates may take longer due to additional legal or court requirements. Working with a lawyer can help keep the process moving, minimising delays and ensuring all documents are correctly filed.
Do You Need an Estate Lawyer for Probate?
Although hiring a lawyer is not mandatory for probate, an estate lawyer’s knowledge is invaluable. Executors who attempt probate without legal support may find the process overwhelming, especially when facing detailed applications, unexpected disputes, or challenging tax calculations. Merely completing the forms can pose a real challenge; last name first is required on some lines, whereas, first name first is required on other lines.
Conclusion
Probate can be a complex and time-consuming process, but with the help of an experienced estate lawyer, you can navigate it more efficiently. Legal support reduces potential errors, expedites asset distribution, and helps ensure your loved one’s wishes are honoured as intended.
If you’re an executor or family member seeking assistance with probate, consider consulting with a licensed estate lawyer in Ontario to ease your burden and ensure a smoother, more secure estate settlement process.
For professional guidance with probate and estate matters, visit our BRT to connect with a vetted estate lawyer today.
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