What is an Estate Trustee?
An Estate Trustee (ET) is the individual or individuals who are chosen to administer an estate upon the death of the testator.
Often, these individuals are named in the will of the testator, or in the case of intestacy (no will) they may assume their role upon the death of the testator. However, there are certain scenarios in which an ET would have to prove the validity of the will in surrogate court and, thus, their appointment as ET.
When the testator passes away, what’s called “legal title” to the property vests in the ET. There is often a significant burden placed on the ET, who becomes a fiduciary and takes on a high degree of liability in administering the estate.
What is “probate”?
To “probate” the estate is to have the will proved in court as the last will and testament of the testator (deceased) or, if no will, to apply as the Estate Trustee.
This is done through an application to the court for a Certificate of Appointment of Estate Trustee, which is issued to an eligible Estate Trustee or, in certain cases, multiple Co-estate Trustees.
New legislation came in commencing January 1, 2015 changing the way estates are administered including increasing the risks, responsibilities and liabilities of Estate Trustees. For example, there is the requirement of filing an Estate Information Return. There are now also new legislative directives regarding auditing requirements for estates – including audits that can occur long after an estate’s administration has ceased.
Probate Fees
Probate fees refer to what is officially known as estate administration tax (governed by the Estate Administration Tax Act).
These fees are calculated in a very straightforward way; however, this particular tax consideration is only one of many regarding estates. Proper estate planning with regard for tax consequences is crucial.
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The amount of tax payable upon the issuance of an estate certificate for which application is made after June 7, 1992 is,
(a) five dollars for each $1,000 or part thereof of the first $50,000 of the value of the estate; and
(b) fifteen dollars for each $1,000 or part thereof by which the value of the estate exceeds $50,000. 1998, c. 34, Sched., s. 2 (6).
More simply, it’s 0.5 percent on each $1000 for the first $50,000 ($250 for $50,000) and 1.5 percent thereafter.
There are many decisions to be made regarding probate fees – when it’s necessary to probate the estate and when it’s not; how to go about the process and to whom the fees are payable; who is eligible to be an estate trustee, and what are the relevant criteria?
Ontario Estate Management is there to help guide you through the process.