This is one of the questions most frequently asked by executors and beneficiaries. At McConnan Bion O’Connor & Peterson we assist executors in preparing all the documentation necessary to obtain probate of the estate and thereafter to administer the estate in accordance with the terms of the will. The law requires that beneficiaries be notified in a certain manner, that they consent to certain steps being taken, and that those notifications and consents all be recorded and be in hand at the time application for probate is made. If a beneficiary does not return documents promptly or cannot be immediately located, that can lengthen the amount of time involved. Once an application for probate is made, it generally takes 6 to 8 weeks before the court issues the grant of probate. Once the court issues the grant of probate, estate assets can be liquidated and distributed among beneficiaries.
Following your death, your executor will be responsible for ensuring that your tax return for the calendar year in which you have died is prepared and filed. At the same time, your executor will also be required to file final tax return which effectively “closes your account” at the Canada Revenue Agency. This return will deal with any taxable dispositions that resulted from your death, such as capital gains that must be paid if you held any capital investments at the time of your passing. Following the filing of the final return, a clearance certificate is issued by the Canada Revenue Agency which then allows the executor to complete distribution of the estate. Executors can be held personally liable for ensuring that the tax returns are prepared accurately and the tax owing is paid.
Probate fees are calculated on the value of your estate, at date of death, in accordance with the following formula:
- No fee if the estate is worth less than $25,000;
- A basic fee of $208 if the estate is worth over $25,000;
- A basic fee of $208 plus $6 per $1,000 (for a total of $358 for the first $50,000) if the estate is worth between $25,000 and $50,000;
- $358 plus $14 per $1,000 of estate value over $50,000 if the estate is worth over $50,000.
These figures are current to November 2018 and are subject to change.
Probate is the court order that is issued allowing your executor to execute the provisions of your will. Probate is the legal sanction to your executor to carry out the terms of your will and distribute your estate in the manner described in your will. Your executor requires a grant of probate before he or she can obtain control of a number of the assets in your estate including investments held in financial institutions, real estate and the like. Once the grant of probate is obtained, an executor can then proceed to liquidate the estate in preparation of distributing it as set forth by your will. If there are persons that are entitled to make a court application to vary your will, the executor must wait to distribute your estate, or obtain the consent of all those persons who are entitled to apply or named in the will to an earlier distribution. An executor must also obtain a clearance certificate from the Canada Revenue Agency before wholly distributing your estate.
Generally, assets that are in your name would be included in your estate. Exceptions include assets that you hold jointly with another (those assets will go to the surviving owner) and assets for which you are able to designate a beneficiary such as RRSPs and insurance policies. The dollar value of the assets actually in your name that are not held jointly or designated to a beneficiary form the assets that comprise your estate, and it is the dollar value of those assets that are used to calculate probate fees.
