In Ontario, probate fees—officially called Estate Administration Tax (EAT)—apply to the total value of assets solely owned by the deceased at the time of death, including real estate, bank accounts, and investments without designated beneficiaries. Assets with joint ownership, direct beneficiaries, or those in a secondary, non-probated will are generally exempt.
Assets that are not subject to probate in Ontario include:
Assets that were held jointly (there are exceptions) CPP death benefit. RPPs, RRSPs, RRIFs, and TFSAs with a beneficiary designation or beneficiary declaration. RDSPs to which the deceased subscribed to but was not a beneficiary.
Generally, assets passing through your estate are subject to the probate and the associated fees. These typically include assets that will be distributed according to the instructions outlined in your Will, such as: Individually owned real estate that is not held in joint tenancy with rights of survivorship.
Which Assets Are Typically Included in Probate? Assets solely in the deceased's name are generally subject to probate. This includes things like: Bank accounts without a designated beneficiary.
Assets that need to be listed for probate are generally those owned solely by the deceased, without a joint owner or designated beneficiary (like Payable-on-Death/Transfer-on-Death), including real estate, bank/investment accounts, vehicles, business interests, and personal property (jewelry, art, furniture). Assets with beneficiaries (life insurance, retirement funds) or held in a trust typically bypass probate and go directly to the named individual.
Assets exempt from probate typically include those with named beneficiaries (life insurance, retirement accounts), jointly owned property with rights of survivorship, assets held in a living trust, and sometimes specific items like homestead property or a certain value of vehicles/household goods, depending on state law, allowing direct transfer to heirs without court involvement.
Assets not considered part of a probate estate, and thus passing outside a will, typically include those with designated beneficiaries (like IRAs, 401(k)s, life insurance), jointly owned property with rights of survivorship (like homes or bank accounts), and assets held in a trust, all of which transfer directly to the new owner or beneficiary by law, bypassing the probate court process.
If the total held by each bank or building society falls below their threshold, then you usually won't need a grant of probate for the money to be released. If it falls above the threshold, then you probably will need to apply for probate.
How to avoid probate in Ontario
HMRC's view is that the probate valuation should reflect a fair open market value on the date of death, not what it happens to fetch later. So, if the house rises in value before it's sold, that uplift is potentially a capital gain, rather than something you adjust on the inheritance tax return.
Probate fees are calculated based on the size of a person's estate when they die. In general, it is based on the fair market value of all property held solely in their name on the date of death. This includes real estate, vehicles, bank accounts, and personal effects including artwork and jewelry.
How to reduce probate fees
If an accountholder does not designate a successor-holder or a beneficiary, the TFSA becomes part of the deceased's estate and, if in Ontario, will be subject to Ontario's estate administration tax (formerly referred to as probate).
Assets held in a living trust, assets with named beneficiaries like life insurance life insurance, or those held in joint ownership. If a savings account is also in both peoples names and is a joint account, then that won't go through probate either.
The "40-day rule after death" refers to traditions in many cultures and religions (especially Eastern Orthodox Christianity) where a mourning period of 40 days signifies the soul's journey, transformation, or waiting period before final judgment, often marked by prayers, special services, and specific mourning attire like black clothing, while other faiths, like Islam, view such commemorations as cultural innovations rather than religious requirements. These practices offer comfort, a structured way to grieve, and a sense of spiritual support for the deceased's soul.
Banks often freeze accounts once they're notified of the account holder's passing to protect the estate. Doing so ensures that the funds are distributed according to the deceased person's will or state laws.
If someone dies without a will, the bank account will typically go through probate, where state laws of intestacy will determine how the funds are distributed.
Want to make your assets virtually untouchable by creditors and lawsuits? Equity stripping may be the answer. This advanced technique involves encumbering your assets with liens or mortgages held by friendly creditors, such as an LLC or trust you control.
Tax-free lump sum payments (where the individual dies under 75) must be made within two years of the scheme administrator being notified of the death of the individual. Any lump sum payments made after the two-year period will be taxed at the recipient's marginal rate of income tax.