It often feels as though there are several loose ends to tend to when an Ontario resident dies. If an individual left an estate plan, that should make the process go more smoothly. Those documents can also help determine whether and how much estate administration tax is due.
Ontario now calls probate fees the estate administration tax. The amount due is based on the total value of the property owned by the decedent at death. For instance, if a loved one owned a home, a car and had bank accounts at the time of death, this tax would represent a percentage of the total value of those assets.
However, if a trust owns these items at death, then they are not included in the calculation of this tax. Moreover, any assets that pass directly to someone else upon death would not be included either. For instance, if a home was titled as joint tenants with rights of survivorship, that home automatically becomes the property of the joint owner upon death and is not subject to estate administration tax. The same applies to life insurance proceeds, funds in retirement accounts and other accounts from which a beneficiary designation passes on the property outside of a will.
Determining whether estate administration tax is due and an Estate Information Return is required for a particular estate could prove challenging. There are numerous rules and conditions regarding this part of the process. A lawyer can help ensure that everything is done correctly the first time in order to avoid unnecessary problems and delays.