What was formerly and familiarly called probate is now referred to as a Certificate of Appointment. The change in title is part of the revised Ontario law, 2015 which made substantive changes to the requirements of “probate” and to the position of executor. The Ontario government provides a helpful page explaining the probate process and filing fees, stating the fee structure of $5 for each $1,000 for the first $50,000 of the value of the estate, and then $15 per thousand of the value of the estate exceeding $50,000 and also provides a handy calculator. See ontario-probate.ca/probate-basics/probate-fees-taxes. Officially, however, the term probate is now replaced by the Estate Administration Tax and by its initials as used on the government’s website, EAT.
The Deed of Gift
Not readily available on the government’s web pages is an instrument called the Deed of Gift; the testator – the person drawing up the will – gifts a specific item to a designated person. It can be employed multiple times, so that the testator can leave a valuable piece of jewelry to one child, a painting to another, a watch to a sibling, and so on. However, testators retain the gift and its use during their lifetime, as opposed to giving an outright gift, with possession going to the beneficiaries after their demise, or should they become mentally incompetent. Because it has been legally set aside as a Deed of Gift during their lifetime, it is excluded from probate, and its value removed from probate fee calculation, lowering the estate tax. CRA restrictions do apply, however; legal advice can determine which of your assets can be shielded by the Deed of Gift, and what cannot.
Deed of Gift: revocable and irrevocable
As the terms imply, one type of Deed of Gift can be revoked, or canceled at any time prior to it being given to the intended recipient, while the other cannot. A revocable Gift of Deed might not be deemed exclusive to probate, defeating its purpose. Such items will be decided individually; should judgment go against the item, the gift will be included in the probate fee structure. If the testator is certain of the decision to give the gift, however, then by deeming it irrevocable, the asset will be excluded from probate. For further discussion please refer to www.howardnightingale.com/add-deed-gift-will-probate-proof-toolbox
The Deed of Gift and the Dual Will, also discussed in the Estate Planning section as well as in my blog (double-or-dual-wills-how-to-reduce-probate-fees) are two helpful means of reducing your exposure to probate fees.