What are probate fees and can I reduce them?

Probate fees are fees paid to the Government of Ontario from a person's estate after they die.

They're also called an estate administration tax, or probate tax.

When you apply for probate, the court:

• makes sure that the person's will is valid, if there's one
• confirms an estate trustee to distribute the estate.

Calculating probate fees

Probate fees are based on the total value of a person's estate when they die. The less property they have in their estate, the lower the fees.

In Ontario, there are no probate fees on the first $50,000 in an estate. After that amount, the fee is $15 for every $1,000.

Use the government's estate administration tax calculator to find out what to pay in probate fees.

Reducing probate fees

Here are some ways to reduce your probate fees:

• give gifts to people and organizations while you're alive name a designated beneficiary on investments such as:
  • a life insurance policy
  • a benefits plan
  • registered plans like registered retirement savings plans (RRSPs) or tax-free savings accounts (TFSAs)
• own property with someone else jointly

If you do this, these assets are not part of your estate when you die and are not included when calculating probate fees. They're also not affected by your will or the intestacy rules.

But even simple ways to reduce probate fees can create risks. Without help from a professional, these plans to reduce probate fees may create more problems.

Alter ego trusts and joint partner trusts are other options to reduce probate fees, but you usually need legal help to set them up.

Consider risks

When trying to reduce probate fees, there are several risks to keep in mind. For example, if you:

• put assets in joint ownership or a trust while you're alive, you may lose control over those assets
• gift assets before you die it can create tax problems.

Get legal help

To avoid problems with your estate, it's best to get advice from legal and financial professionals. For example, an estates lawyer can advise you on how to reduce probate fees while avoiding legal problems.

If you cannot afford a lawyer, you may be able to get free or low-cost legal help.

If you cannot get professional help, try and make sure that your will and other documents clearly say what you want. Review them regularly to ensure that your plan reflects your wishes.