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.
Disclaimer:
"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."
