George Tey, MBA, CFP
CERTIFIED FINANCIAL PLANNER® Professional
CERTIFIED FINANCIAL PLANNER® Professional
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Compliant content provided by Adviceon® Media for educational purposes only.
These Estate Fees and Taxes can Reduce an Estate’s Value:
Probate Fees These fees (now to be called Estate Administration Fees (EAT) in Ontario) are essentially taxes charged by the provinces for confirming that a will is valid, and the executor has the authority to act, referred to as “Letters of Probate” (essentially a tax on your estate). Probate/EAT fees and taxes could be as high as 1.5% of your estate limited only in Quebec, Alberta, and the Territories.
Deferred Sales Charges (DSCs) at Death Generally no charges are applied to Segregated Fund and Term Fund policies at the time of death.
Legal and Executor Fees Legal and executor fees range from 3% to 6% of the estate. These fees are paid to the executors who are responsible for many complexities such as locating the will, arranging the funeral with the family, assessing and determining names and addresses of beneficiaries and next of kin, finding the assets and liabilities, and tax return preparation.
Accounting Fees Significant estates can be very complicated. Thus, an accountant may need to file the final tax returns to ensure the orderly transition of assets and reduction of liabilities for the Executor/Trustee. An accountant’s fees can run upward to another 6% of the total assets.
Life insurance policies, segregated fund and term fund policies with a named beneficiary, do not form part of the estate and are not subject to any executor, legal or trustee fees because these proceeds are distributed directly to named beneficiaries. This means the accounting fees can be reduced during the estate’s assessment.
Note: Registered investments bypass probate. This may not apply in certain provinces, and advice should be sought from a tax specialist and/or an advisor.
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