Ontario’s rigorous probate compliance regime makes the selection of an appropriate trustee more crucial than ever.
Since 2015, part of an executor’s duty in this province is to file an Estate Information Return (EIRs) within 180 days of getting a probate certificate, which discloses to the Ministry of Finance a comprehensive list of information about the deceased person and their assets.
The documents were introduced over concerns people were undervaluing assets in order to land a lower estate administration tax, which is charged at 1.5 per cent on the value of an estate over $50,000.
Now Ontario’s probate regime is one of the strictest in the country, with the province reserving the right to audit and reassess the estate’s value for up to four years.
And while audits appear to be carried out only rarely, they come with some hefty potential penalties: in addition to any additional tax the estate is liable for, trustees could be fined up to twice the amount of extra tax owing, or up to two years in jail if they’re found to have made a false statement on the EIR.
On the bright side, recent reforms to the probate process have made the process simpler, cutting the number of forms involved for an application from 58 to 23 and making it easier to file online or by email.
However, estate trustee is still a job that requires a great deal of responsibility, which is why it’s best to ensure your choice for executor knows what they’re getting themselves into ahead of time.
A trusted friend or family member may be preferable, but there’s not much point selecting someone who lacks either the time or the interest necessary to do the job properly. I know from bitter experience how difficult things can get when the executor named in a will doesn’t want to act.
The best way to avoid this kind of scenario is to engage in a frank discussion with your preferred executor, explaining why you want them to do the job and exactly what will be expected of them.
Prospective executors should know that they can expect to be in the job for at least a year, gathering financial information, signing forms, filing taxes, paying off debts and distributing assets under the estate.
Although they will generally be able to seek help from lawyers, accountants and other professionals, the executor is expected to coordinate any necessary work.
If nobody among your friends and family fits the bill, it may be worth approaching a trust company to administer your estate instead.
Disclaimer: The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.
