When one is required to make an application for probate, formally known as seeking a Certificate of Appointment as an Estate Trustee, the provincial government looks for its pound of flesh. Under The Estate Administration Tax Act, the province levies a tax of 1.5% of the value of the estate in excess of $50,000. With a $2,050,000 estate, this equals the tidy sum of $30,000. Our firm’s strategy known as the “Full Monty” provides an absolute saving of this tax. Just enter “Full Monty” in the search window for more information on the strategy.
To add insult to injury, the taxes are due when the application for probate is filed.
Sometimes clients of Will and Estate Lawyers such as our firm, do not have the funds available to pay the probate tax in advance. Estate lawyers see this situation when the estate is almost entirely comprised of a home, and not until it is sold will funds be available. Part of the normal services that Dale Streiman Law LLP Wills and Probate lawyers provides is seeking an order under Section 4 (2) of The Estate Administration Tax Act. We get a Judge’s order deferring the payment of the probate tax, often framed as within three months of the home actually being sold.
It is important that everyone remember that the application for a deferral must be brought before a Judge and that the Judge needs the following information:
1. Why the estate certificate aka probate is urgently required.
2. Details of the financial hardship that would result from not issuing the estate certificate aka probate before the probate taxes are paid.
3. Confirmation that sufficient security for payment of the probate tax has been provided to the court. This usually is satisfied by listing the assets and debts of the estate, and in our example that the home is available with a significant amount of equity sufficient to pay the tax.
The filing of an Estate Information Return at the conclusion of the probate process is a service that our firm provides, which is not always the case with other lawyers who dabble in the area of probate and estate administration.
