What Is Probate Fee? How Is It Calculated In Ontario?
Have you inherited a property? Do you have a will, which needs to be verified and authenticated? Well, probate is a legal process that allows you to do so. Probate is a complex and typical process; hence, we provide you with a perfect article that covers all your doubts regarding probate and guides you thoroughly about the probate process. Thus, keep reading and become well-informed.
Source: Freepik
What Is the Meaning of Probate in Simple Language?
- Probate is a process or method recognized by the law, and specialized probate courts execute it.
- Probate starts after the death of an individual and involves the properties, wills, and assets.
- The process of probation majorly comprises the following steps.
- You need to submit the proofs, evidence, and supporting documents in court to ensure that the will is legal, authentic, and valid.
- The lawyers will distribute the estate/ wealth/ assets following the legally established will or as per the court’s discretion.
- They will prepare a systematic catalog or index which lists all the assets with their reasonable value.
- They will pay the debts, taxes, and other outstanding payables.
- You may find this process to be time-consuming as:
- There are several court appearances.
- There is a need to maintain several files and
- It involves a lot of paperwork.
- Most of the beneficiaries or, we can say, families usually hire an executor who can be a lawyer, financial advisor, or even a non-professional. Further, there is also a possibility that the will of the deceased comprises the name of the executor.
- The appointed executor files the will in the court and starts the probation process.
What Are Probate Fees in, and How Is It Calculated?
The process of probation (as mentioned above) attracts several types of fees, such as legal fees, filing charges, court fees, etc.
Besides all these fees, there is an additional expense that you pay the provincial government when it grants you a certificate to appoint an estate trustee. We know this expense as “estate administration tax” or “probate fees.”
The calculation of probate fees relies on the total market value of your estate/ wealth at the time of your death. Hence, we assume that the probate fee and the value of your estate maintain a direct relationship with each other. The higher the value of your estate, the higher will be your probate fees.
Further, different Canadian provinces charge probate fees differently and have their own rules and regulations. The Ontarian Government calculates the probate fee per Chapter 34 of the Estate Administration Tax Act, 1998. The Ontarian Government calculates the probate fees in different slabs below:
| Slab | Total Value of Estate | Probate Fees |
| I | Up to $50,000 | $5 for every $1000 |
| II | Above $50,000 | $15 for every $1000 |
For a better understanding, let us have a look at the calculation of probate fees in different circumstances:
| Value of the Estate | Slab I (A) | Slab II (B) | Total Probate Fees (A + B) |
| $30,000 | $150 ($30,000/$1,000 * $5) | Not Applicable | $150 |
| $50,000 | $250 ($50,000/$1,000 * $5) | Not Applicable | $250 |
| $100,000 | $250 ($50,000/$1,000 * $5) | $750 (($100,000 – $50,000)/$1,000 * $15) | $1,000 |
| $500,000 | $250 ($50,000/$1,000 * $5) | $6,750 (($500,000 – $50,000)/$1,000 * $15) | $7,000 |
| $1,000,000 | $250 ($50,000/$1,000 * $5) | $14,250 (($1,000,000 – $50,000)/$1,000 * $15) | $14,500 |
| $2,000,000 | $250 ($50,000/$1,000 * $5) | $29,250 (($2,000,000 – $50,000)/$1,000 * $15) | $29,500 |
| $5,000,000 | $250 ($50,000/$1,000 * $5) | $74,250 (($5,000,000 – $50,000)/$1,000 * $15) | $74,500 |
What Are the Different Ways You Can Reduce Probate Fees?
The probate fee calculation relies on the estate value, which covers all the assets owned by the deceased. However, certain assets are exempt from probate tax and not included in the estate value.
Such exempted assets are:
- All the proceeds the deceased received from the life insurance plans owned in the name.
- All the proceeds the deceased received from retirement plans, such as R. R. S. P (Registered Retirement Savings Plan), Pension Plans, etc.
- The assets are:
- Held by multiple owners
- In the capacity of joint tenancy
- With a right of survivorship
What Is the Practical Working of Probation? Also, Explain the Calculation of Probate Fees?
Let us understand the process of probation through a practical example.
- Michael Williams, a resident of the Greater Toronto Area, was an 80-year-old veteran who recently died from a heart attack.
- Noah Williams, Liam Williams, and Emma Williams are the three legal heirs of Michael Williams.
- Michael Williams died as a testator and has left behind a valid will, wherein he has divided his estate among his three legal heirs equally.
- He even named an executor in his will, who had started the process of probation in the probate court.
- Below is a list of all the assets owned by Michael Williams:
| S. No. | Assets/ Estate | Value |
| 1 | Vacation home in Florida | $500,000 |
| 2 | 60 debentures of ABC Consulting Inc. (Face value = $1,000 per debenture) | $60,000 |
| 3 | Fixed Deposits in Nova scotia Bank | $100,000 |
| 4 | Proceeds received from RRSP (Registered Retirement Savings Plan) | $50,000 |
| 5. | Residential House in the Greater Toronto Area | $750,000 |
| Total Estate Value | $1,460,000 |
- The probate court found that:
- The will is legal
- The claim of legal heirs is valid
- The total estate value is $1,460,000
The Ontarian government issued a certificate and charged a probate fee by calculating in the following manner:
Calculation of Total Estate Value (For the Purposes of Calculation of Probate Fees)
| S. No. | Assets/ Estate | Value |
| 2 | 60 debentures of ABC Consulting Inc. (Face value = $1,000 per debenture) | $60,000 |
| 3 | Fixed Deposits in Nova scotia Bank | $100,000 |
| 5. | Residential House in the Greater Toronto Area | $750,000 |
| Total Estate Value | $910,000 |
Calculation of Probate Fees
Probate Fees= $910,000 − $50,000/$1,000 * $15+$250 = $12,900 + $250= $13,150
- The probate court ordered for the division of the estate of Michael Williams equally among his legal heirs.
What Are the Different Ways Using Which You Can Reduce or Avoid Probate Fees?
Probate fees can be a hefty expense and hurt even more when the estate value is immense. However, you can certainly reduce it and even avoid the probate fees by diminishing the value of your estate using the intestacy rules. We can do this in the following manner:
- You can own the estate jointly, instead of a single ownership
- You can transfer the assets to a trust, such as alter ego trusts, joint partner trusts, etc.
- You can gift your property while you are alive
- You can create multiple wills. It can reduce your burden of probate fees.
These measures allow you to reduce your probate fees, as these assets are not included in calculating the asset value.
