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Probate is the process of authenticating or proving a Will. Probate essentially serves as proof to financial institutions, land registry offices and investment dealers that your Will has been certified by the court and that the Executor is authorized to represent the estate. Probate provides comfort to third parties dealing with an estate and may protect the Executor in situations where a later Will is subsequently discovered. Most provinces refer to the cost of probate as a fee. In Ontario, the cost is called an "Estate Administration Tax" and the grant of probate is known as a "Certificate of Appointment of Estate Trustee with a Will". In this article, we will refer to probate and probate fees.
Probate Planning
Probate fees vary greatly by province. Fees are generally based on the gross value of the deceased’s assets passing under the Will. Generally speaking, the only debt which can be deducted is a mortgage on real estate. The table below summarizes current (as of March 2010), provincial fees.
| Province |
Fee Schedule |
Maximum |
| Alberta |
- $25 for estates under $10,000.
- $100 for estates between $10,000 and $24,999
- $200 for estates between $25,000 and $124,999
- $300 for estates between $125,000 and $249,999
- $400 for estates of $250,000 and over
|
$400. |
| British Columbia |
- $0 for estates under $10,000.
$208 for estates between $10,001 and $25,000
- $6 for every $1,000 or part of $1,000 by which the value of the estate exceeds $25,000 but is not more than $50,000
- Plus $14 for every $1,000 or part of $1,000 by which the value of the estate exceeds $50,000.
|
None |
| Manitoba |
- $70 for the first $10,000, plus $7 for every $1,000 thereafter
|
None |
| New Brunswick |
- for the first $5,000: $25
- $5,001 to $10,000: $50
- $10,001 to $15,000: $75
- $15,001 to $20,000: $100
|
None |
| Newfoundland & Labrador |
- <$1,000: $60
- $1,000+: $60 + $0.05 for each additional $100
|
None |
| Northwest Territories & Nunavut |
| Value of all property, real and personal, within the Northwest Territories, after deducting all debts and liabilities against that property. |
Fee |
| $10,000 or under |
$25 |
| More than $10,000 but not more than $25,000 |
$100 |
| More than $25,000 but not more than $125,000 |
$200 |
| More than $125,000 but not more than $250,000 |
$300 |
| More than $250,000 |
$400 |
|
None |
| Nova Scotia |
- $77.00 for estates not exceeding $10,000
- $193.61 for estates exceeding $10,000 but not exceeding $25,000
- $322.21 for estates exceeding $25,000 but not exceeding $50,000
- $902.03 for estates exceeding $50,000 but not exceeding $100,000
- $902.03 for estates exceeding $100,000, plus $15.23 for each additional $1,000 or fraction thereof, in excess of $100,000
|
None |
| Ontario |
- $5 on each $1,000 for the first $50,000 and $15 per $1,000 thereafter
|
None |
| Prince Edward Island |
- up to $10,000: $50
- $10,001 - $25,000: $100
- $25,001 - $50,000: $200
- $50,001 - $100,000: $400
- $100,000+: $400 + $4 for each additional $1,000 part thereof
|
None |
| Quebec |
- $100 for non-notarial Will
- $0 for notarial Will (notarial Wills do not need to be probated)
|
$100 (non-notarial will) |
| Saskatchewan |
|
None |
| Yukon |
- No fee is payable to obtain a Grant of Letters Probate and Administration where a person dies leaving an estate not exceeding $25,000 in value.
- To obtain a Grant of Letters Probate and Administration where a person dies leaving an estate exceeding $25,000 in value, there is a fee of $140.
|
None |
Tips to Avoiding or Minimizing Probate Costs
In an effort to simplify the administration of the estate, save time and money, and/or keep the Will private, efforts are sometimes made to avoid applying for probate. There are a number of proven techniques to avoid or minimize probate costs. Before acting on any of these tips, you should seek the advice of a lawyer or accountant.
Tip #1 - Give it away while you are alive
As strange as it sounds, if you die without an estate, there is nothing left to probate. If a gift to a spouse, child, grandchild or other beneficiary makes sense and wouldn't jeopardize your well-being, you might consider it as a means of avoiding probate. However, take care when giving appreciated capital property because in most cases it will trigger the realization of capital gains. If the property gifted produces income and the beneficiary is your spouse, a minor child or a grandchild, you'll continue to include this income in your taxable income (attribution rules, Income Tax Act). And remember, once you gift something, you lose control and cannot get it back.
Tip #2 - Register or re-register assets in joint tenancy with rights of survivorship
Assets that are registered in joint tenancy with rights of survivorship (not applicable in Quebec) may become the property of the joint owner on the death of an owner and thereby bypass the estate. Generally speaking, it may be wise for spouses, at least in a first marriage situation, to register their family home and other assets jointly in order to avoid probate and simplify the administration of the estate of the first spouse to die. However, caution should be exercised when registering or re-registering assets in joint tenancy, particularly with anyone other than a spouse. In addition to possible income tax consequences, such as income attribution and the triggering of capital gains,, the asset may be exposed to the creditors of the new joint registrant. Perhaps most importantly, the asset may not devolve to your intended beneficiaries. You should consult your professional advisor before proceeding.
Tip #3 - Establish an inter-vivos trust
An inter-vivos trust is a trust that you establish during your lifetime. A trust is created by a donor settling (giving) assets to a trust for the benefit of a beneficiary. The assets of the trust are managed for the beneficiary by the trustees of the trust. By settling a trust during your lifetime, you no longer own the assets. You may, however, be a trustee and exercise a degree of control over the assets. Once settled, however, the assets are trust assets held for the benefit of the beneficiaries. Here you have, in fact, given away the assets, but in a different way than in Tip #1. Once again, the income tax implications must be considered. Alter ego or joint-partner trusts are types of inter-vivos trusts available to those age 65 or older. Such trusts receive special treatment under the Income Tax Act. You may wish to consider such trusts along with, or as a substitute for your Will or Power of Attorney for property.
Tip #4 - Establish a spousal trust in your Will
While a testamentary spousal trust will not help reduce probate fees payable on your estate for probate, it may reduce the probate fees payable on the death of your spouse.
For example, if John leaves property to a spousal trust for the benefit of his wife Marie during her lifetime, Marie can enjoy the trust property and spend the income from the trust. The property is not, however, in her name, it is simply held in trust for her. When Marie dies, the property passes directly to residual beneficiaries named in John's Will, without being included in Marie's estate. An added advantage to this approach is that during Marie's lifetime, she and the spousal trust are separate taxpayers and this usually results in lower overall income taxes compared to all the property and income being held by one taxpayer.
Tip #5 - Designate beneficiaries for registered products and choose estate-friendly investments
By designating an individual, rather than your estate, on assets such as RSPs, RIFs and life insurance, such assets may pass directly to your chosen beneficiaries and bypass your estate. Such designations may also offer some creditor protection.
Insurance companies offer a range of highly competitive fixed-rate investments that act just like Guaranteed Investment Certificates (GICs). They are often referred to as Guaranteed Interest Annuities (GIAs). They also offer segregated funds that are similar in many ways to mutual funds. Estate-friendly investments are frequently underutilized in estate planning. Through ScotiaMcLeod Financial Services, our independent insurance agency subsidiary, we can assist clients with a wide range of products from the leading Canadian insurance companies.
Tip #6 - Establish multiple Wills
With care and professional drafting by your lawyer, it may be possible, in some provinces, including Ontario, to separate your assets into two groups: those for which probate will be required; and those which can be transferred without probate. While this approach requires more work, depending on your circumstances, it can substantially reduce the cost of settling your estate. Some assets, such as the shares of a private company, normally do not require probate to be dealt with by an executor. If you own a private company with a significant value, it may be possible for this asset to be dealt with in a separate will and the executor can avoid probate on this asset. Again, legal advice is critical in this strategy.
For more information, on probate planning please contact a ScotiaMcLeod advisor.
The information contained on this website is for use by persons resident in Canada only.
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