What is probate and why is it required?
Probate is a process in which a court confirms the validity of a will. This process verifies the authority of the executor and validates that the will is, in fact, the last will and testament of the deceased. If the proceeds include certain types of assets, such as real estate, they may not be able to distribute until the will clears probate.
Although probating a will is not legally required, most financial institutions demand it if the level of assets invested with a financial institution or the assets of the entire estate exceed a certain amount.
Consequences of Probate
The probate process may be a lengthy one, potentially tying up assets for months (and much longer if a will is contested). For a spouse or dependents in need of funds, the delay could result in serious financial problems.
Each province also has a schedule of probate fees to be paid based on the size of the assets subject to probate. In Alberta the maximum probate fee is $400 however, in other provinces it can be substantially more.
Options for reducing probate costs
There are various options that one can use to reduce these costs. Each option may have other negative consequences (such as loss of control or immediate taxation on deemed disposition) and should be entertained by an individual only after consultation with his/her legal representative and accountant. Here are some of these options:
1. Owning assets jointly with right of survivorship (such as joint bank accounts)
2. Setting up an out of province trust
3. Using insurance investment products (funds, GIC’s) that have named beneficiaries
What is probate and why is it required?
Probate is a process in which a court confirms the validity of a will. This process verifies the authority of the executor and validates that the will is, in fact, the last will and testament of the deceased. If the proceeds include certain types of assets, such as real estate, they may not be able to distribute until the will clears probate.
Although probating a will is not legally required, most financial institutions demand it if the level of assets invested with a financial institution or the assets of the entire estate exceed a certain amount.
Consequences of Probate
The probate process may be a lengthy one, potentially tying up assets for months (and much longer if a will is contested). For a spouse or dependents in need of funds, the delay could result in serious financial problems.
Each province also has a schedule of probate fees to be paid based on the size of the assets subject to probate. In Alberta the maximum probate fee is $400 however, in other provinces it can be substantially more.
Options for reducing probate costs
There are various options that one can use to reduce these costs. Each option may have other negative consequences (such as loss of control or immediate taxation on deemed disposition) and should be entertained by an individual only after consultation with his/her legal representative and accountant. Here are some of these options:
1. Owning assets jointly with right of survivorship (such as joint bank accounts)
2. Setting up an out of province trust
3. Using insurance investment products (funds, GIC’s) that have named beneficiaries