What to Expect When You Probate Ontario Estates – Part 2

This is a continuation from Part 1, which you can read here.

Estate Court Probate Process

The estate court staff review estate court applications. They check for issues and can request extra materials. If mistakes or incomplete information are filed, the process can be delayed. Original documents may need to be picked up from the court and refiled.

Once court staff are satisfied, they submit documents for signing approval. Judges may accept what is filed or ask for additional information. We must answer any questions judges have.

This process is usually done without anyone appearing in court. It can take 3-5 months or much more.

The court can ask lawyers to attend court to answer judge’s questions.

I always prepare paperwork to avoid potential questions.

Estate Administration Tax Act – Provincial Probate Tax

Many questions arise about probate taxes and the estate information return (EIR). I will explain them below.

The key distinction is simple.

Probate taxes are paid to the estate court when you apply for probate.

The EIR is sent AFTER you receive probate papers. The EIR is sent to the province’s Ministry of Finance. It is filed within 90 days AFTER the court issues the estate certificate.

Timeline Example

You are an executor for a person who dies in January. You prepare an estate inventory that month. Your lawyer files an estate court probate application in February. You may get the estate certificate, depending on court backlogs, in July. The estate information return EIR is due 90 days later or in October.

Since January 1, 2015, all estate trustees must file an Estate Information Return (EIR). The Ontario Ministry of Finance can thus confirm all provincial estate taxes were paid. Taxes of roughly 1.5% must be paid based on the value of estate assets.

The EIR is due within 90 days after the estate certificate is issued. Estate trustees sign and file the EIR with the Ministry of Finance. The EIR provides details of all assets and their value. As estate trustee, you must certify the document is true, correct and complete.

The Ministry can reassess the estate for taxes up to four years from the date of filing.

Provincial Probate Penalties

Estate trustees face penalties for not including or misrepresenting estate values.

Penalties include:

1. a) a fine of at least $1,000 or twice the tax payable by the estate;
2. b) imprisonment for not more than 2 years; or
3. c) both.

Persons may avoid penalties if they demonstrate returns were not false. Appraisals are usually required to substantiate your numbers.

Estate Records

As estate trustee, you must retain financial records for a minimum of four years. This is in case you are reassessed by the Ministry of Finance.

Errors in EIR

If you discover errors, you are required to amend the EIR. This amended return is filed within 30 days of when you discover any error.

Read my other free reports before you act and avoid getting into trouble:

Executor Duties: What You Need to Know

Executor Mistakes: 10 Things Executors Must Never Do

I look forward to helping you with any estate matter.