Minimizing Probate Fees
January 2006
Probate fees are levied by the provincial government and can represent a significant cost to one’s estate. There are strategies to help minimize these costs.
Probate is a legal process whereby a deceased’s will is reviewed, and confirmed to be the last will and testament of the deceased.
A Grant of Probate attracts the following fees (based on the value of the Estate):
- $200 on the first $25,000
- $6 per thousand from $25,001 up to $50,000
- $14 per thousand on the remainder
A will is probated within the jurisdiction where a client normally resides and probate fees are only applied to Estate assets located in that province. If the deceased held assets located in another province, fees may be levied in that jurisdiction.
A Grant of Probate is usually requested if the deceased owned property in their individual name, valued at more than $10,000. Property could be defined as an automobile, cash in a bank account, Canada Savings Bonds, etc.
Once a Grant of Probate is requested, all assets owned by the deceased in their individual name and shares of jointly owned assets that do not carry “survivor rights” form part of the estate.
Where ”survivor rights” are present at death, the property passes directly to the survivor(s) rather than through the deceased’s Estate. Some assets (such as RRSPs, life insurance policies or pooled pension investment accounts) can have a named beneficiary and may therefore not be included in one’s Estate.
There are several ways to minimize probate fees:
- Where possible, name beneficiaries so that these assets may pass directly to the beneficiary without forming part of the estate
- Consider owning assets jointly with survivor rights. For example, a home held jointly with a spouse or partner can be held in “joint tenancy” rather than “tenants in common”.
- Assets may be gifted to eventual beneficiaries prior to the original owner’s death. Gifts are not subject to probate fees because the deceased did not own the asset(s) at death.
- Probate fees may be reduced through the creation of a trust and the transfer of assets to that trust. These assets are not subject to probate fees as they will no longer be included in the deceased’s estate.
IMPORTANT NOTE: PLEASE REVIEW THESE STRATEGIES WITH QUALIFIED LEGAL AND ACCOUNTING ADVISORS
While probate fees may not be entirely avoidable, they can be minimized.
Your Rogers Group Financial Advisor can assist you with strategies to make the most of your Estate and to minimize your costs.