The New Year brought with it some significant changes that will affect the duties of many executors. Our estate clients at my law office in the Kanata-Stittsville area of Ottawa have had a lot of questions including the following:
I’m acting as my mother’s executor. Someone told me that there is a new form I have to submit to the government. Is this true?
Yes, if you submitted your ‘probate’ application to Court after January, 1, 2015. The popular term ‘probate’ refers to a Certificate of Estate Trustee issued to the executor (now referred to as an estate trustee in Ontario). The estate trustee is required to file an Estate Information Return (EIR) with the Ontario Ministry of Finance. It must be filed within 90 days of the date that the Certificate of Appointment of Estate Trustee is issued by the Court. The EIR reports details of the deceased and the Certificate, the assets of the estate, how the date-of-death values were determined and the amount of estate administration tax (EAT). The EIR confirms that EAT has been paid and that any balance owing is enclosed with the EIR.
I’ve also heard the estate trustees can be audited. For up to how long can this happen? Is there any way to protect myself?
Under Ontario law, the Ministry of Finance may conduct an audit of the information reported in an EIR at any time up until four years (but no limit if there is fraud) from the date that the Certificate of Appointment of Estate Trustee was issued. At this time, there is no option for an estate trustee to request the equivalent of a Clearance Certificate similar to that issued by Canada Revenue Agency (CRA) with respect to income tax filing. The estate trustee can request a ‘comfort letter’ from the Ontario Ministry of Finance. However, the comfort letter will only be provided if the estate trustee has first obtained a Clearance Certificate from CRA and has sent a request in writing to the Ontario Ministry of Finance asking for the comfort letter.
If an estate trustee does not obtain a comfort letter from the Ministry of Finance with respect to the EAT paid and the EIR that was filed, the estate trustee should hold a reserve in an amount anticipated to cover the cost of legal and/or accounting advice and possible penalties, interest and missing EAT if an audit is conducted and there is a finding that the EIR is incomplete or that asset values were incorrectly reported or incorrectly calculated.
If you are acting as an estate trustee or executor, call 613.836.9915 or email [email protected] to make an appointment to meet with me at my Ottawa office. We will review your duties and responsibilities and explain the EIR and what is needed to comply with the new regulations so that the job goes as smoothly as possible.
Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.
