The holiday season offers a rare opportunity for family members
to come together to discuss important issues, including the often
uncomfortable topic of estate planning. This year, it is important
for testators and those they will appoint as their estate trustees
to broaden that discussion to include Bill 173 (Better Tomorrow
for Ontario Act (Budget Measures), 2011) and its impact on
estate administration. Amendments introduced by Bill 173 were
incorporated into the Estate Administration Tax Act (the
"Act"), with some significant changes
coming into force on January 1, 2013.
In Ontario, when a person dies, an estate trustee is usually
appointed to administer the deceased's estate. This includes,
among other things, gathering the deceased's assets, paying his
or her debts, and distributing the balance of the estate to
The estate trustee may be required to apply for a Certificate of
Appointment of Estate Trustee
("Certificate") from the Ontario
Superior Court of Justice to provide evidence of authority to deal
with the estate's assets. Upon such application, estate
administration tax ("EAT") must be paid
on the value of the assets in the deceased's estate that are
included in the application. If the value is based on estimation,
it is now customary that the estate trustee provide a signed
undertaking to file a sworn statement of the actual total estate
value when determined, and to pay additional EAT if the value was
Changes to Estate Administration Tax Act Effective
January 1, 2013
The jurisdiction for the collection of EAT will now lie with the
Ministry of Finance, rather than the Ministry of the Attorney
General. For applications made on or after January 1, 2013, estate
trustees applying for a Certificate may be required to provide the
Minister of Revenue with information about the deceased's
assets as prescribed by the Minister of Finance.
It is not clear what this information will be as regulations are
not yet available, but it is possible that an inventory of assets
owned by a deceased person, as well as valuations and appraisals,
may be required. The estate trustee will need to provide such
information within the time, and in the manner, as decided by the
Minister of Finance.
The Minister of Revenue now has the power to assess and reassess
an estate, in respect of its EAT payable under the Act, within four
years after the day the tax becomes payable.
What does this mean?
The job of administering an estate is becoming more difficult
and it is now more crucial than ever for estate trustees to obtain
accurate information and supporting documentation proving an
estate's value. If false or misleading statements are provided,
the estate trustee may be fined and/or imprisoned for up to two
To help ease this process, testators may want to start thinking
carefully about who to appoint for this difficult task, and keep
records and documentation about their assets to assist in providing
an accurate valuation.
Perhaps more importantly, greater attention should be given to
estate plans to try and avoid the need for a Certificate at all. An
estate lawyer can help. WeirFoulds would be pleased to assist.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
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