You work all your life to build an estate of your own. The term estate includes all assets such as real estate, art, jewelry, bank and savings accounts, shares of your small business, investments, and any loans given to businesses, friends, or family. Any asset of which you are the sole owner becomes your estate. Probate comes into the picture after the estate owner dies. The estate is transferred to beneficiaries listed in the estate owner’s will. Without the will, the government will distribute the assets in the estate.

Probate is a legal process that validates the will of the deceased person and gives the executor the legal authority to transfer assets, manage taxes, clear debt, and close the estate. The exact process of probate and the associated fees can vary from province to province, but the overall objective of probate is the same – to protect the executor, financial institutions, and beneficiaries from another person claiming the estate.

Most wills in Canada require probate. The only exceptions would be if all the assets were either jointly owned with right of survivorship or passed directly to named beneficiaries outside the estate. If the estate is smaller, the probate process may be simpler. For example, in Ontario, if the estate is valued at $150,000 or less, an application can be made under the small estate court process instead of the regular court process. A lawyer can advise whether a will requires probate, and which process is the most appropriate in your circumstances.

In this article, we will help you get an understanding of probate and what to consider while building your estate.

Step 1: Probate Application

Upon the owner’s death, the executor named in the will notifies the spouse and children of the deceased, beneficiaries, and other executors of his/her intent to execute the will. The executor then applies for a probate grant in the province’s court where the deceased lived at the time of death.

A probate application requires the executor to submit certain documents and fill out specific forms depending on the provincial laws. Some general documentation requirements include:

• The probate application
• Death certificate
• An original copy of the will
• An affidavit of execution of the will provided by a witness of the will
• A list of assets and liabilities at the time of death
• List of beneficiaries and their entitlements
• Proof that the executor has notified beneficiaries of the probate application
• In case of multiple executors in the will and only one applying for probate, confirmation of other executors renouncing their position.

Step 2: Probate fees

The probate application requires a list of all assets and liabilities and their fair market valuation. Based on the estate’s value, probate fees/taxes are determined. Some provinces charge a flat fee, and some charge a certain percentage of the estate. The executor pays the probate fees and taxes from the estate money.

Fees could be significant. Hence, it is important to consider them during estate planning.

Step 3: Granting of Probate

After the application is filed, the provincial court will ascertain the validity of the probated will and grant the probate in a few weeks or months. The court can take anywhere from 6 weeks to 12 months to grant probate to the executor. However, the process could take longer if the will has issues or challenges. Once the probate is granted, a probated will is open for a fee for public viewing through court records.

Step 4: Executing the Will

The executor may now execute the transfer of assets as dictated by the will. Their job is complex as they must carry out everything from funeral planning to repaying the deceased’s debts and tax liabilities, resolving all disputes, closing the accounts, and transferring what is left of the assets to beneficiaries. Identifying and valuing assets is a time-consuming process. You can make this a bit easier by leaving a detailed list of assets with your estate planning documents. Some password managers allow you to designate emergency access to a trusted contact (i.e. your executor), which could make the process of accessing your accounts easier for them as well.

The executor also has to deal with family disputes and any disagreement between beneficiaries that could escalate into legal disputes. Any ambiguity in the distribution of assets could result in beneficiaries or heirs contesting the will. All this could lead to significant delays and hefty legal fees. 

Things About Probate to Consider in Estate Planning

Probate fees and taxes, as well as the potential legal cost if a will is contested, are important considerations in estate planning. Estate planning involves protecting the estate value and ensuring a smooth transition of assets with minimal tax implications and probate fees.

If you are building up an estate, it’s better to consult a tax advisor before buying a real estate or transferring existing property. A tax advisor can incorporate strategies like joint ownership with survivorship benefits and selecting a beneficiary for your savings account to reduce or avoid probate fees on significant assets. These strategies may not work the same for everyone, as taxation and creditor liabilities must also be considered.

Contact McCay Duff LLP in Ottawa to Help You with Estate Planning

To learn more about how the team at McCay Duff LLP can provide you with the best estate planning expertise, contact us online, or by telephone at 613-236-2367 or toll-free at 1-800-267-6551.