Probate is Perplexing – Use these 10 Concepts to Enlighten Ontario Trustees

My probate tips will help Ontario estate trustees/executors understand probate.

1. Probate matters are handled by the Superior Court of Ontario. Everyone refers to this as the estate court or probate court. However, there is no longer a designated estate court.

In Toronto, estate cases are assigned to an estate list for judges to hear. This is not a designated estate court with estate judges. Estate matters were formerly handled by a Surrogate or probate court.

2. Probate taxes are legal in Ontario. They are called estate administration taxes (EAT). These are provincial taxes levied on the value of certain estate assets.

3. Estate federal taxes or inheritance taxes do not exist in Canada. Our cousins in the United States, however, do have estate or inheritance taxes.

In Canada, when a person dies, there is no federal estate inheritance tax payable. However, income tax rules treat certain assets as income. This income is included in a person’s last tax return. These are referred to as the deemed disposition rules.

4. Payment of income taxes is made by the estate, not by beneficiaries. A person’s will, however, may direct that taxes are to be paid otherwise. For example, a beneficiary can be required to pay the taxes associated with a gift of an RRSP.

5. Probate is required for persons who die intestate or without a will. Only persons living in Ontario can handle an Ontario intestate estate. A Certificate of Appointment of Estate Trustee without a Will is applied for in Ontario. Intestate means the person died without a valid will. You cannot avoid probate by dying without a will.

6. Probate permits an estate trustee to sell estate assets. When a person dies, their estate trustee becomes their legal representative. The estate trustee has power over all the deceased’s property controlled by the person’s will.

Estate trustees obtain a Certificate of Appointment to confirm their authority to sell estate assets. There could be a more recent will or document that cancels the estate trustee’s authority. That is why the will must be approved by the court. This confirms there are no later or conflicting wills.

Remember, a power of attorney ceases to be valid once a person dies. The attorney no longer has legal authority to act.

7. Permission for executors to purchase estate assets must be in the will. Estate trustees cannot purchase estate assets without this specific authority. Otherwise, the estate trustee may need permission from a judge and the beneficiaries’ approval.

8. Probated wills can still be challenged after the court has issued a Certificate of Appointment to an estate trustee. Wills can be challenged for noncompliance with legal formalities.

Additional grounds for attacking a will include:

• undue influence by a third party
• fraud in the making of the will
• lack of testamentary capacity by the person making the will
• lack of knowledge and approval of the contents of the will

9. Court orders are required for handwritten or holographic wills to be accepted for probate. Homemade wills are frequently the subject of court challenges.

10. Letters probate is an older term used in Ontario to describe a will that is probated. A Certificate of Appointment of Estate Trustee with a Will is the correct term used in Ontario.

Probate is confusing since it has so many different meanings.

I trust these tips will give you practical insights. Subscribe to my blog for more executor insights. You will discover more useful information about your duties as an executor.

About the Author

Edward Olkovich (BA, LLB, TEP, and C.S.) is a nationally recognized author and a Toronto estate lawyer and Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of seven estate books including Executor Kung Fu: Master Any Estate in Three Easy Steps. Visit his law firm’s website, mrwills.com, for more free valuable information.