I have been named the estate executor in the Will. Do I still need to submit an Application for a Certificate of Appointment of Estate Trustee?
Although it is true that an estate executor derives his or her authority from the Will itself, depending on the assets of the estate and the manner in which the assets are held, the executor may nonetheless be required to apply to the Ontario Superior Court of Justice for an Application for a Certificate of Appointment of Estate Trustee (commonly referred to as “probate”) notwithstanding that the deceased passed away with a valid Will naming that particular estate executor.
Further, even if it may appear at the preliminary stages of the administration of the estate that probate will not be required, third parties such as financial institutions and the Director of Titles for properties registered in the Ontario land titles system, may not recognize the estate executor’s authority without the executor first obtaining a Certificate of Appointment of Estate Trustee.
What is the “Estate Administration Tax” and when is it payable?
The Estate Administration Tax (EAT), commonly referred to as “probate tax” or “probate fees” is only payable if probate is required, meaning an Application for a Certificate of Appointment of Estate Trustee is submitted to the Ontario Superior Court of Justice. However, depending on the assets of the estate and the manner in which the assets are held, probate is not always required.
The amount of tax payable is based on the value of the estate that is being probated. Currently, the amount of Estate Administration Tax payable in Ontario is $15.00 per $1,000 on the portion of the value of the estate that is over $50,000 (meaning that no tax is payable on the first $50,000 of the value of the estate or if an estate is valued at $50,000 or less).
The tax is to be paid by way of cheque made payable to the “Minister of Finance” at the time that the Application for a Certificate of Appointment of Estate Trustee is submitted to the court and is to be paid by the estate and not the estate executor. If the executor subsequently discovers additional assets so that additional tax would be payable, the additional amount must be paid to the Ontario Superior Court of Justice where the Certificate of Appointment of Estate Trustee was issued. The executor would also be required to submit an affidavit attesting to the revised values of the estate at the time of death and provide an explanation as to the different values.
More information about the Estate Administration Tax can be found at: https://www.ontario.ca/page/estate-administration-tax
The Estate Information Return
If probate was required and a Certificate of Appointment of Estate Trustee (CAET) has been issued by the Ontario Superior Court of Justice, then within 180 days from the date that the CAET is issued, the estate executor must file an “Estate Information Return” which will set out the details of how the valuation for the probate application was determined. The estate executor is responsible for submitting the form within the required time frame. Further, if within four years after the issuance of the CAET, the estate executor becomes aware that the information submitted was incorrect or incomplete, the executor must deliver an amended return to the Ministry of Finance within 60 calendar days of the trustee becoming aware of the inconsistency. Failure to file the form, or making false or misleading information in the form, could lead to fines or even imprisonment.
More information on the Return as well as a link to the Estate Information Return Form can be found here: https://forms.mgcs.gov.on.ca/en/dataset/9955.
A Guide to completing the Estate Information Return Form which outlines the assets that need to be included can also be found at the above-noted link.