Changes proposed in the province’s budget could lead to reduced fees and easier filing down the road
The recent 2019 budget from Ontario was arguably most notable for an announced framework regulating the titles of “financial planner” and “financial advisor.” The announcement has drawn broad support from industry groups and professionals, who agree that a policy requiring title-holders to have appropriate credentials is long overdue.
Ontario-based financial planners may also be interested in another set of proposed reforms included within the budget that would impact the administration of estates within the province. “The 2019 Budget includes proposed changes to the Estates Administration Tax Act, 1998, and an associated Regulation, to be effective January 1, 2020,” wrote Corina Weigl, Emily Hubling, and Jennifer Campbell of Canadian law firm Fasken.
The first proposed change, they noted, alters how Estates Administration Tax, more commonly referred to as probate fees, will be calculated. Payable when an application for a Certificate of Appointment of Estate Trustee with or without a will is filed with the court, the fees are currently levied at a rate of $5 per $1,000 (or part thereof) on the value of estate assets between $1,000 and $50,000. For any value of assets beyond $50,000, the fee rate is $15 per $1,000 or part thereof.
“The 2019 Budget proposes to eliminate the payment of Probate Fees on the first $50,000 of value of an estate,” the experts from Fasken said. In other words, individuals who pass away owning assets worth $50,000 or less — which would require a certificate to be administered by the individual’s executor or administrator — would not have to worry about their estate having to pay probate fees.
“For larger estates, with a value of greater than $50,000, this change gives rise to a savings of $250, as no Probate Fees will be payable on the first $50,000 of asset value,” they said.
Another change that estate planners may look forward to would extend the deadline to file an estate information return. As the authors explained, “an executor or administrator for whom a Certificate has been issued is required to file an ‘Estate Information Return’ with the Ministry of Finance within 90 days of the issuance of the Certificate.”
Compared to the application for a Certificate of Appointment of Estate Trustee, the Estate Information Return would include more details about the assets of the estate. Those include an inventory of the assets, along with the fair-market value of each, at the date of death. Different specific details will also be required depending on asset type. For example:
- For real property, the address of the property, assessment roll number and property identifier number;
- For bank accounts, the name and address of the financial institution and account number;
- For investments, the details of all shares, stocks, bonds and the broker/agent name and address; and
- For vehicles, the vehicle identification number and make and model
Under the proposals in the new budget, the initial filing deadline for the Estate Information Return would be extended from 90 days to 180 days after the issuance of the certificate. It would also extend the filing deadline for an amended Estate Information Return — necessary in case the executor or administrator discovers incorrect or incomplete information — from within 30 days of the discovery to within 60 days.
