Will and Probate Planning

Ontario levies a probate fee on assets owned at death, in the amount of 1.5% of the value of the assets.

This fee can be reduced or eliminated altogether. Here are some possible options:

• A secondary will can be used to avoid probate on certain assets that by their very nature do not normally need to be probated. This would include valuable private company shares and debts owing from private companies. If governed by a single will these assets must be probated even if one asset in the will is eligible for probate. If those assets which normally do not need to be probated are governed by a secondary will, the fees can be avoided. If for example your company is worth $5,000,000 the probate fee is $75,000. The cost of a secondary will is a whole lot less.
  
• Taxpayers 65 years of age and older can transfer property to a trust to avoid probate. If the trust is set up properly, this objective can be accomplished without any income tax.
  
• An estate is entitled to a low set of tax rates like individuals. The same goes for a trust that is created out of one’s will. It is possible to save your heirs income tax by leaving assets to a trust for their benefit as opposed to them directly. The trust will likely be taxed at a much lower rate than they are.