Probate fees & executors fees.

• Author: Platten, Karen A.

Probate Fees

In October, 1998, a decision of the Supreme Court of Canada in Re Eurig Estate, 1998, had lawyers, executors of estates, trust companies, and the general public asking "what now?" in terms of probate fees (the fee that courts charge to confirm the validity of a will and the appointment of an executor). That decision determined that probate fees charged in Ontario were actually taxes because the amount charged bore no relation to the services performed. As the court pointed out, the probate of any estate was basically the same, but the fees (or tax) charged varied depending on the value of the estate. Because the amount charged was determined to be a tax, the ability to charge it had to be found in a statute originating with the legislature and not under regulations of the executive branch of the government, as had been done with increases to probate fees in 1992.

The real reason behind the outcry was the amount of tax imposed. In Ontario the charge on probate is $5 per $1,000 of estate value up to $50,000 and $15 per $1,000 of value over $50,000. Therefore, an estate of $500,000 would be required to pay $7,000 in probate fees. An estate of $2,000,000 (which would require the same services to obtain probate) would be charged $29,500 in probate fees.

In the case of Mrs. Eurig, the widow and testatrix of the individual whose estate was being probated, she had paid the probate fees under protest and, in fact, had already appeared in two lower courts on the same issue, losing each time. The Supreme Court of Canada determined that, because she had paid the fees under protest, the fees which she had paid would be refunded to her. This amounted to $5,710 which was probably far less than she had paid to have her case heard on three different occasions.

On December 18, 1998, royal assent was given to Bill 81 enacting the Ontario Estate Administration Tax Act, 1998, which imposes the new tax on probate applications. The tax was made retroactive to May 15, 1950 and uses the same graduated structure which had been in place in Ontario since 1992.

Practically speaking, the issue of probate fees is not as compelling in Alberta as it is in British Columbia or Ontario where the costs are very similar. Although all three Provinces use the same general system of determining how much a grant of probate should cost, the percentage and the amount of the fees differs greatly in Alberta. The maximum fee in Alberta is capped at $6,000 no matter what the...