Many Ontario beneficiaries assume inheritance will be distributed shortly after a loved one passes away. In reality, the Ontario inheritance process is often far more complicated. Probate fees, taxes, legal costs, mortgage payments, and ongoing estate expenses must usually be addressed before executors can distribute the inheritance to beneficiaries.
Clara’s Ontario inheritance situation
Clara was about to inherit a $1 million estate from her dad. But she was in shock to learn that before she can get that money, she needs to come up with $20,000 to pay for immediate costs.
This includes a $14,250.00 Estate Administration Tax, which needs to be paid when we submit the probate application, not after the application is approved.
And a standard legal fee of $5000 + HST and approx. $500 in disbursements. This is used to submit a probate without a Will application to the Court. Until this application is approved, Clara cannot access the estate funds.
What’s more, because Clara’s dad did not have a Will, the Court may require Clara to purchase bond insurance costing 5% of the entire estate, which in this case would be $50,000. This is required whenever the Court cannot ascertain who all the beneficiaries are. If Clara’s dad happened to have a spouse or other children unknown to Clara, or if Clara lied about her father being a widow and her being the only child, then the insurance payout can cover such mistakes.
So ideally, when doing estate planning, Clara’s dad should have left her some cash in TFSA, RRSP, or life insurance. When those products have designated beneficiaries, Clara can get those funds within 5-10 business days of her dad’s passing. In comparison, when filing for probate, it takes on average 1-2 years to be approved.
How we helped Clara resolve all these problems
First, we asked Clara to check if her father had any TFSA or RRSP accounts with the bank. Turns out he had a small TFSA of $10,000 naming her as the designated beneficiary. She was able to use this fund to cover all legal fees and disbursements.
Then, we applied to the bank and asked them to pay the $14,250 Estate Administration Tax (“EAT”) from the deceased father’s bank account. Most banks are extremely unwilling to do this, out of fear of liability and unwillingness to go the extra mile for a stranger like Clara. Banks are often extremely slow to respond and ask for many documents to be signed. But all of those obstacles can be easily cleared with an experienced probate lawyer. In this case, we got the bank to pay EAT within just one week.
In addition, we asked the bank to reimburse Clara for the $30,000 she spent on her father’s funeral by showing them a legitimate receipt from the funeral home.
Lastly, in our application, we submitted multiple documents and motion materials requesting that the Court waive the 5% bond insurance requirement. We succeeded! Clara didn’t need to purchase this expensive insurance.
Unfortunately, Clara still has to pay expenses for the upkeep of her father’s estate property. This includes paying for property taxes, cleaning fees, repair fees, etc. As well, as there is still an outstanding mortgage on the title, the bank could take the estate property away under the power of sale, if we don’t receive probate approval fast.
Understanding this is putting Clara under considerable stress, we applied for probate within 2 weeks of being hired and received approval within 3 months! Now, Clara has access to the entire $1 million estate and can finally breathe.
She sold the property, paid the outstanding mortgage and the income taxes, and gave herself the rest of the inheritance. We are so happy we helped Clara through the toughest part of her life.
What you can learn from Clara’s case
Clara’s situation illustrates an important lesson about the Ontario inheritance process: large estates do not always result in immediate inheritance distribution.
Probate delays, taxes, legal fees, and ongoing property expenses can create temporary financial pressure even when the estate contains substantial assets.
Families often focus only on the total estate value without understanding:
- How probate works
- When assets become accessible
- Which expenses must be paid first
- How executor responsibilities affect inheritance timelines
Proper estate planning, liquidity planning, and early legal guidance can help reduce delays and financial stress for both executors and beneficiaries.
Final Thoughts
Many Ontario beneficiaries are surprised to learn that the distribution of an inheritance may take months and that estate expenses must usually be addressed before funds are released. Clara’s case is a reminder that the Ontario probate process involves more than simply dividing assets. Executors must carefully manage legal obligations, taxes, probate requirements, and estate expenses before the inheritance can be distributed properly.
Understanding these realities early can help families better prepare for the estate administration process and avoid unnecessary conflict, confusion, and financial pressure.
If you have any questions about your Wills, Probate Application, or Estate Administration, please click HERE to book a 1st free consultation with us.
