Estate Administration Tax & Probate

Step 1: Probate Fee Calculation

Calculate the total value of all assets owned by the deceased at the time of death. In Ontario, the Estate Administration Tax is zero for estates valued under $50,000. For estates exceeding this amount, the rate is $15 for every $1,000 (or part thereof) of the total estate value. Use the Final Estate Checklist to ensure no registered or non-registered accounts are omitted during the initial valuation.

Step 2: Joint Tenancy Mechanics

Apply the right of survivorship to reduce the probatable estate size. Assets held in "Joint Tenancy with Right of Survivorship" pass directly to the surviving owner without becoming part of the deceased's estate for tax purposes. Verify your title deeds to distinguish between Joint Tenancy and Tenancy in Common, as the latter does not provide the same tax bypass.

1. Review property deeds for "Joint Tenant" designation.
2. Update bank account titles to include secondary owners where appropriate.
3. Document the intention of a "Gift of Right of Survivorship" to avoid resulting trust claims.

Step 3: Beneficiary Designations

Assign specific beneficiaries to registered accounts such as RRSPs, RRIFs, TFSAs, and life insurance policies. When a beneficiary is named directly within the policy or account, the proceeds bypass the estate and the probate process entirely. This ensures immediate capital transfer and zero EAT liability on those specific instruments. Consult the Asset Distribution Framework to align these designations with your overall will structure.

Step 4: Tax Liability Reduction Protocols

Implement secondary wills for corporate assets to insulate private company shares from the probate process. In Ontario, the "Granovsky" strategy allows for a Primary Will (for probatable assets) and a Secondary Will (for non-probatable assets like small business shares). This can save thousands in taxes for business owners. Ensure this is coordinated with Will Drafting Protocols to prevent revocation conflicts.