How Probate Fees (Estate Administration Taxes) Work in Ontario
When dealing with estate planning and the transfer of assets after death, one of the most misunderstood aspects in Ontario is probate—particularly the fees and taxes involved. Known officially as the Estate Administration Tax, these probate fees can significantly affect the total value of an estate that’s passed on to beneficiaries, such as when parents are passing their home on to their children.
This guide explains how probate fees work in Ontario, how they’re calculated, who pays them, and strategies to handle or reduce them responsibly.
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What Is Probate?
Probate is the legal process that confirms the validity of a will and officially appoints an executor (also known as an estate trustee) to manage the deceased’s estate. In Ontario, probate is often required before certain assets—such as real estate, bank accounts, and investments—can be transferred to beneficiaries or sold.
Probate essentially gives the executor legal authority to:
Access and manage estate assets.
Pay outstanding debts and taxes.
Distribute assets according to the will.
While some assets can pass outside of probate, many estates—especially those involving real estate—require it.
What Is the Estate Administration Tax?
Ontario’s Estate Administration Tax (EAT) is the fee paid to the provincial government as part of the probate process. It is often referred to as probate fees, though “tax” is the correct legal term.
The tax is calculated based on the total fair market value of the deceased’s estate at the date of death.
Assets Included in Estate Value:
Real estate (less certain mortgages).
Bank accounts and cash.
Investments (stocks, bonds, mutual funds).
Vehicles and recreational property.
Personal belongings with significant value (art, jewelry, collectibles).
Business interests.
Other assets under the deceased’s name.
Important: Certain assets, such as real estate outside Ontario, or property that passes by joint ownership or beneficiary designation (e.g., life insurance with a named beneficiary), may not be included in probate calculations.
Probate Fee Rates in Ontario (As of 2025)
The Ontario Estate Administration Tax rates are as follows:
$0 on the first $50,000 of estate value.
1.5% on amounts exceeding $50,000.
Example:
If the total value of an estate is $800,000:
First $50,000: No tax.
Remaining $750,000: 1.5% = $11,250 in Estate Administration Tax.
How Are Real Estate Assets Handled?
Real estate often forms a major part of an estate’s value. The value of property for probate purposes is based on its fair market value at the date of death, minus any mortgage registered against the property itself.
However, not all debts reduce the probate fee:
Registered mortgages on real estate reduce the estate value for probate.
Unsecured debts, like credit cards or personal loans, do not.
Example:
Home value: $700,000
Mortgage: $200,000
Net probate value of home: $500,000
Who Pays Probate Fees?
While the probate fees are a legal cost of administering an estate, they are paid by the estate itself, not directly by the beneficiaries.
Common Ways Estates Cover Probate Fees:
Using cash from bank accounts held by the deceased.
Selling investments or other liquid assets.
Selling estate property (if necessary).
Executors may sometimes pay fees upfront and then reimburse themselves from the estate.
In rare cases, borrowing against estate assets or securing short-term loans.
Banks in Ontario will often release funds specifically for probate fees and funeral costs even before probate is granted, provided they receive documentation proving the need.
When Is Probate Required?
Probate is usually required in Ontario if:
The deceased held assets solely in their name.
Real estate needs to be sold or transferred (unless jointly owned with right of survivorship).
Financial institutions require proof of the executor’s legal authority to release funds.
Some smaller estates or certain assets held in joint ownership, trusts, or with named beneficiaries may not need probate.
Strategies to Reduce Probate Fees
While probate fees are unavoidable in many cases, there are a few legal strategies that may reduce the overall Estate Administration Tax:
1. Joint Ownership with Right of Survivorship
Transferring property into joint ownership with a spouse or trusted family member can allow the asset to pass outside of probate automatically upon death.
Caution: Doing this with adult children or others can cause unintended consequences, such as exposure to their debts, divorce claims, or disputes over ownership.
2. Named Beneficiaries
Some assets, such as RRSPs, RRIFs, and life insurance policies, allow you to name a beneficiary directly. These pass outside of the estate and don’t attract probate fees.
3. Gifting Assets Before Death
Gifting property during your lifetime removes it from your estate, reducing probate fees. However, this strategy can trigger capital gains taxes and other legal issues.
4. Trusts
Setting up a trust, such as an alter ego trust or joint partner trust, can help keep certain assets out of the estate and avoid probate—but trusts involve legal costs and complex administration.
Risks of Trying to Avoid Probate
While minimizing probate fees can sound appealing, it’s important not to focus solely on tax savings:
Joint ownership can create legal disputes or unintended tax consequences.
Gifting assets may lead to loss of control, family conflict, or excessive taxes.
Overcomplicating an estate plan can cause confusion and high legal costs later.
In many cases, paying probate fees is a simpler and safer option than attempting aggressive avoidance.
Key Takeaways
Probate fees in Ontario (Estate Administration Tax) apply to the total fair market value of an estate’s assets at the time of death.
The tax rate is 0% on the first $50,000 and 1.5% on the remainder.
Real estate, bank accounts, investments, and personal belongings all contribute to the estate’s taxable value.
The estate—not the beneficiaries—pays the probate fee before any assets are distributed.
There are legal ways to reduce probate fees, but every strategy carries its own risks.
Conclusion
Understanding how probate fees work in Ontario is essential for anyone involved in estate planning or administering an estate. While the Estate Administration Tax can represent a significant cost, it’s a normal and predictable part of settling an estate in Ontario.
If you’re considering probate planning, it’s wise to speak with an estate lawyer or financial advisor to assess your situation and make informed, responsible decisions.
