How do probate fees figure into estate planning?
It has been said that there are two certainties in life: death and taxes. And both these things apply when it comes to estate planning for Ontario residents. Estate administration taxes or probate fees are a fact of life and death. The fee coincides with the total property value of a person’s estate. The more property a resident owns upon death, the higher probate fees will be on the estate.
Ontario probate fees
Ontario probate fees are:
$5 for every $1,000 worth of assets up to $50,000
$15 for every $1,000 worth of assets more than $50,000
Ontario has a tool – estate administration tax calculator – to help executors ascertain probate fees which will be paid from the estate. The positive here is that probate fees can be reduced in a few ways such as:
Giving gifts while still alive
Owning property jointly
Having a beneficiary for investments such as life insurance, RRSPs, TFSAs, etc.
If taken care of in these ways, these assets are not considered part of an estate and so aren’t included when calculating probate fees. The law looks at them as passing outside the will or unaffected by a will or rules of intestacy. Other ways of reducing probate fees include joint partner trusts and ego trusts, which are more complex and likely need legal help to set up.
No matter what is involved in estate planning, getting advice from an Ontario lawyer who is experienced in estate planning laws is a wise step. A lawyer is able to offer further insight on reducing probate fees and can answer questions about confusing areas of estate planning. Creating an estate plan doesn’t need to be difficult if you work with someone who has some knowledge about the process.