Estate Administration Summary

Estate Administration Overview

  • Estate Administration Process: Involves distributing a deceased person’s estate.

    • With a Will: Estate trustee named in the will, may require Certificate of Appointment (Letters Probate).

    • Without a Will: Court-appointed estate trustee distributes per intestacy rules; requires Certificate of Appointment (Letters of Administration).

The Deceased’s Will

  • Estate trustee derives authority from the will; accepted upon proof (notarial copy, death proof, trustee identity).

  • Some asset holders may require a Certificate of Appointment for authority verification.

Certificate of Appointment of Estate Trustee With a Will

  • Needed for validating estate trustee’s authority to administer the estate.

  • Issued under court seal (Letters Probate).

  • Application includes probating the will and submitting necessary documentation.

  • Estate administration tax applies based on estate value.

Certificate of Appointment of Estate Trustee Without a Will

  • Required for intestate situations; must apply for letters of administration.

  • Applicant must be an Ontario resident; consent of major beneficiaries is necessary.

  • Administration bond may be needed unless exceptions apply.

Valuation of the Estate

  • Necessary for determining estate administration tax.

  • Key considerations include: personal property, real property, joint ownership.

Estate Administration Tax (Probate Fees)

  • Tax applies during Certificate of Appointment application; no charge on the first $50,000, 1.5% on the balance.

  • Certain assets passing directly to beneficiaries are exempt.

  • Encumbrances against assets (except real property) cannot be deducted.

Types of Testamentary Gifts

  • Specific Gift: Specific item to a specific person.

  • Demonstrative Gift: Amount from a specified source.

  • General Gift: Amount from general assets.

  • Devise: Gift of real property.

  • Residuary Gift: Remaining estate after debts and other gifts.

Distribution of Estate

  • Estate trustee pays creditors first; then distributes according to will or intestacy rules.

  • Ademption occurs if a gift no longer exists at death.

  • Gifts fail in specified order (residue, general, demonstrative, specific, devise).

  • Gifts may lapse if the beneficiary is deceased.

Compensation to Estate Trustee

  • Compensation typically 2.5% of assets coming into and distributed from the estate.

  • If beneficiary, the estate value for compensation calculation is reduced by the gift's value.

  • Passing of accounts may be required to validate trustee actions to beneficiaries and the court.