Ontario Estate Administration Tax : Tax tips

 

Probate Fees: Inter Vivos Trust

The Canadian Income Tax Act allows a person who is at least 65 to use an inter vivos trust as an alternative to a will to transfer assets free from the probate fees levied under the provisions of the Ontario Estate Administration Tax Act.

Probate Fees: Alter-Ego Trusts and Joint Partner Trusts

The Ontario Estate Administration Tax Act provides for probate fees of $5 tax payable for each $1,000 in value of the estate up to $50,000 and a $15 tax for each $1,000 above $50,000. Section 73 of the Canadian Income Tax Act allows for the creation of alter-ego trusts and joint partner trusts which would avoid probate fees. These trusts cannot be created by will. The person who gifts property to the alter-ego trust (i) must be alive and be at least 65, (ii) must be entitled to receive all the income of the trust prior to their death, and (iii) must be the only person able to receive income or capital of the trust prior to their death.