Probate is the legal process by which the Provincial Supreme Court certifies the validity of the deceased’s will. The probate process involves filing the original will, various application documents and a list of all the assets and liabilities of the Estate.
When the will has been validated, the Executor named in the will receives a document called “Letters Probate” which gives the authority to administer the Estate.
Items not included in the assets of the Estate:
- Assets in joint tenancy. These pass to the remaining joint tenant(s) on the death of one of the owners
- Assets with a named beneficiary (as long as no other beneficiary of the same asset is named in the will), e.g. insurance policies, RRSPs, RRIFs
- Assets in an Inter Vivos Trust
- Assets held outside BC
Probate is required in most cases if the Estate has:
- Real estate (either in the decedent’s name alone or in tenancy-in-common rather than joint tenancy)
- Stocks, government bonds or CSBs
- Assets greater than $10,000-$15,000 held in banks or trust companies
Probate fees are based on the gross value of the Estate:
|less than $10,000||No fee|
|$10,000 to $25,000||$208|
|$25,000 to $50,000||$208 + $6.00 per $1,000 or any part thereof|
|$50,000 and up||$350 + $14.00 per $1,000 or any part thereof|
This represents .7% of the first $50,000 and 1.4% of everything over $50,000.
We frequently are asked about placing assets in joint tenancy with a family member to avoid probate fees later on. There are many issues involved in placing assets in joint tenancy to avoid probate which may have unintended consequences worse than the probate fee, for instance:
- Deemed disposition which results in a tax liability to the original owner
- Possible loss of part of the principal residence tax exemption if it is not the principal residence of both joint owners
- Loss of control of the asset while living. Joint owners have equal legal control over the asset
- Claim against the asset by creditors of the new joint owner
A new type of Inter Vivos Trust has been legislated this year for people 65 and older which may circumvent some of these problems. It is called an Alter-Ego Trust, or a Joint Partner Trust for spouses. See an article in our December issue.