The article “Death and Taxes: Estate Settlement Can Cost Money, Time and Relationships” was originally published on Financial Post on April 21, 2020.

A properly crafted estate plan should envision the financial and family implications that can draw out for years to come.

This is the final instalment of a three-part series on estate costs. The first looked at the tax consequences of dying, and the second at probate and estate administration costs.

Estate settlement can have direct and indirect costs for executors and beneficiaries. Some costs can be minimized with a bit of planning, and others can be well worth incurring to avoid costly consequences.

Estate settlement involves carrying out the final wishes of someone who has died. An executor is appointed by way of a will to settle an estate, while an administrator is appointed by the court if the deceased did not have a will.

Estate settlement is subject to provincial law, and ultimately results in the distribution of someone’s assets to their beneficiaries.

Need Help With Your Estate?

Our team member Maria Tanel is a P1 paralegal licensed by the Law Society of Ontario, notary public, and commissioner of oaths. She has over 25 years of experience working with executors to manage their estate, wills and deal with probates.

Estate assets

Not all assets of the deceased pass through their estate. Assets that are held jointly with right of survivorship may go directly to the joint tenant, and those with individuals named as beneficiaries may bypass the estate as well.

Assets held individually that do not or cannot have beneficiaries, or when the estate is named as the beneficiary, will comprise an estate.

The most common estate assets are individually owned bank and investment accounts, real estate, private company shares, and personal effects.

Funeral costs

A funeral is generally the first cost an estate incurs, and the cost can vary greatly, much like a wedding. The ceremony, reception, casket or urn, and burial option are the main drivers of variability.

Funeral costs can range from $2,000 to $20,000 or more but may average about $10,000.

Burial plots or mausoleum crypts are like condos and houses — pricier in big cities. Some plots and crypts may cost $25,000 or more in high-demand private cemeteries, compared to just hundreds of dollars in public or rural locations.

Cremation is more common in Canada than burials, and a simple cremation costs less than $1,000 in some provinces.

Professionals involved in estate settlement

Lawyers are often the first professionals involved in settling an estate. Some charge hourly rates, while others charge a percentage of the estate. According to Canadian Lawyer’s 2019 Legal Fees Survey, the average estate lawyer in Canada with less than one year of experience charges $213 per hour. Lawyers with more than 20 years of experience charge $437 on average.

Estate settlement is often charged as a percentage of the estate value and can range from 2.5 per cent to 5 per cent. This would amount to $2,500 to $5,000 for a $100,000 estate, or $25,000 to $50,000 for a $1,000,000 estate.

Some people opt to have a trust company settle an estate. The banks have trust company subsidiaries that provide their estate settlement services, and there are also independent trust company options to choose from as well.

A trust company can be written into a will initially during the estate planning process. They will ask you to sign a fee agreement and will want to review the will once drafted and before it is signed. The fees are generally at the higher end of the estate settlement range, often 5 per cent of the estate value plus incidental costs. This may seem high for a simple estate, especially when the primary asset is an expensive home in a big city, for example, but a trust company can be worth considering for a complex or potentially contentious estate. Some people do not have a family member or friend they want to burden with their executor duties, so trust companies can be an option.

Accounting costs may not be significantly higher in the year of death compared to other years depending on the circumstances of the deceased. They may range from hundreds to thousands of dollars depending on complexity. The cases that may result in higher costs are often for special tax elections or additional tax return filings.

There may be optional T1 tax returns that can be filed in the year of death for income earned but not yet paid, for proprietorship or partnership income, or income from a graduated estate. The estate of the deceased may also file a T3 return for income earned by the estate after the date of death, including the CPP Death Benefit.

There may be other professional fees to appraise real estate, value businesses, or sell these assets, but these costs are generally no different than if someone was still alive.

An individual executor who settles an estate on their own may be entitled to compensation if the will does not preclude it, and provinces have pre-determined fee schedules based on the assets held in and distributed from the estate. Family executors often waive their entitlement, particularly given executor fees are considered taxable income, while an inheritance is otherwise tax-free to the recipient.

Other costs

If someone does not have a valid will upon their death, their estate will be distributed to family members according to the intestacy rules in their province of residence, generally starting with their spouse and children before extending to other family members. This can lead to incremental legal and government fees, as well as delays and more importantly, a distribution that may not be in line with your wishes. All adults should have a valid will, especially as their assets increase or when they have dependents who rely on them financially like a spouse or children.

Estate planning mistakes like not having a will highlight some of the indirect costs of estate settlement — the logistical and financial impact on those left behind.

It can be incredibly difficult to settle an estate, even for people who are in the know. My mother passed away in March 2019, and her estate is finally almost settled over a year later. Some of the biggest administrative challenges for us have been delays, oversights, and outright errors by financial institutions. I am well versed in these matters, and my sister is a lawyer, so imagine the challenges a layperson may experience in settling an estate without professional guidance.

An executor can expect to spend up to a year or more carrying out their duties with many tasks along the way, and that is a consideration for anyone appointing an executor as well. The executor may not need to do all the legal paperwork, tax filing, or make all the financial decisions on their own, but they need to be ready, willing, and able to oversee the process with the help of professionals.

Contentious estates can result in arguments between family members. Even estates that may not appear contentious to a testator writing their will can become contentious for reasons they have not envisioned, or perhaps do not want to consider. It is imperative to imagine the implications of your estate being settled, from disputes over big things like cottages or family businesses, right down to little things like personal effects and household items.

The fallout from family disputes may impact relationships, or even spur litigation that can reduce an estate’s value for its intended beneficiaries.


Some estate costs can be avoided with the strategic use of joint ownership, beneficiary designations, gifting during one’s lifetime, or inter vivos or testamentary trusts. I discussed some of these ideas and their impact on tax and probate in the first parts of this series.

Estate settlement can cost money, time, and relationships. Estate planning is often focused on what happens when someone dies, but a properly crafted estate plan should envision the financial and family implications that can draw out for years to come.

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.

Need Help With Your Estate?

Our team member Maria Tanel is a P1 paralegal licensed by the Law Society of Ontario, notary public, and commissioner of oaths. She has over 25 years of experience working with executors to manage their estate, wills and deal with probates.