When it comes to estates, there are 2 main types of taxes / fees. These are the income taxes and probate fees. They are not the same thing, but both taxes happen at the same time – on someone's death. This article does not address the income tax portion of the estate – this should be considered before making decisions on probate since income taxes and probate are linked. What are the probate fees? These are fees charged by the government for reading your will and ensuring that the will instructions are carried out. The court that reads your will is supposed to be there to make sure that property is transferred fairly between people. The fees charged for letters probate depend on the value of the assets that are in the will. If something is not in the will, it will not be included in the probate fee. Despite the title of this article, your estate does not have to include probate fees, but in most cases there would be a probate fee unless the estate is very small. or that all assets be distributed outside the will.
This last statement raises tax planning questions: How could something not be included in the will? Distributing an asset outside of the will means giving someone access to your bank accounts by making them joint, having joint ownership of a house or property, naming someone as beneficiary registered account or insurance policy, transfer assets to a corporation or donate money to a charity in the event of death through charity. life insurance or by giving someone a gift. Be aware that each of these strategies can have drawbacks depending on your situation, so seek professional advice before making decisions on who should receive your assets. The purpose of a will is to ensure that estates are treated fairly because there have been so many disputes and difficulties in the past when it comes to estates due to trust issues. , theft or communication.
The value of the estate at the time of death is very important to ensure that the probate fee calculation is correct. This means that a person's asset records must be up-to-date and easily accessible for the executor / executor to access them. The executor is the person appointed by the deceased (the deceased person) to ensure that the instructions of the will are carried out and that the property is distributed to the affected parties.
Note that probate fees are also referred to as Estate Administration Taxes or EATs. Probate fees depend on provincial jurisdiction, so the will would be read by an Ontario court or other provincial court as needed. If these are assets located in different provinces, the rules of each province should be consulted to determine the probate fees.
How much are these probate fees?
It depends on the value of the estate on the day of death. The figures shown below are for an Ontario-based estate. If the day of death is before January 1, 2020, an estate of $ 1,000 or less will not have probate fees. An estate worth more than that would be calculated as follows:
If an Estate Trustee Appointment Certificate is requested before January 1, 2020, the tax rates are as follows:
$ 5 for each $ 1,000 or part of the first $ 50,000 of the value of the estate, and
· $ 15 for every $ 1,000 or part of the estate value exceeding $ 50,000.
Note: There is no estate administration tax payable if the estate is valued at $ 1,000 or less.
After January 1, 2020, an estate valued at $ 50,000 or less would not have probate fees.
If a Certificate of Appointment of Estate Trustee is requested as of January 1, 2020:
· There is no estate administration tax payable if the estate is valued at $ 50,000 or less. However, exempt estates must continue to file an estate information return within the prescribed time limit.
For estates valued over $ 50,000, the estate administration tax will be calculated at $ 15 for every $ 1,000 (or part thereof) of the value of the estate. estate greater than $ 50,000.