Can I Avoid Probate Tax?
Although there is no estate administration tax in Ontario, that doesn’t mean the deceased’s estate is free of tax obligations. We have something called a probate tax. Probate is a process in which the court establishes the validity of a will. A tax is charged when a will is probated. There are ways to reduce and even avoid probate tax on an estate, but it requires the skilled guidance of a lawyer.
At Filice Law, we have helped many individuals and business owners in Ancaster, Ontario and the Hamilton region use estate planning tools to decrease their probate tax obligations. Our lawyer, Pat Filice can help you select the right estate planning tool to reduce your tax obligations.
Do All Assets Have To Go Through Probate?
Probating a will is necessary when leaving assets like real estate. For example, it is required that a court validate the will where the deceased conveys a home to a beneficiary. Other assets, such as bank accounts, jewelry, insurance policies, and even company shares do not have to go through probate. For those assets there are estate planning tools that can reduce or even eliminate the probate tax.
What Tools Can Be Used To Reduce or Eliminate Probate?
One option is multiple wills. Another option includes registering jointly held assets. That allows for your assets to pass directly to a beneficiary without attracting the probate fee. You can also name beneficiaries for your insurance policies. This including RRSPs and RRIFs held by an insurance company. That will ensure the proceeds do not form part of your estate and will not have to go through probate.
Although these tools are great for saving on probate tax costs, there can be income tax consequences if they are not properly set up. Our lawyer, Pat Filice, can provide you with customized legal advice about which legal tools are best suited to your situation. We confirm your wishes, give advice on each individual asset and determine the most advantageous way to structure your estate to reduce the probate fee.