WILLS & PROBATE

Probate is the legal process that officially proves the validity of a will. This includes an inventory of the decedent’s property, resolving all debts and claims, and distribution of the decedent’s estate. Each province has a general probate law, however, each probate case is administered by the local provincial court and it is best to contact the local courthouse or an attorney for information about your local probate process.

EXEMPTIONS

Determining whether an estate may be exempt from probate will be best indicated by an attorney.  If the decedent has a will, this does not make the estate exempt from probate.  Some assets such as jointly owned property, trusts, and miscellaneous assets may be exempt. However, assets that do not qualify for probate may be inventoried with the estate during the probate process.

THE PROBATE PROCESS

The formal probate process may be necessary depending on the value of the decedent’s assets. Each province’s probate law contains a definite minimum value to determine which probate proceedings are required. The probate process can be lengthy and complex taking as long as a few years to complete. It is advisable to contact your local courthouse or an attorney for more information about the specific process in your province. We have listed some general guidance regarding the probate process below.

The informal probate process may be selected for estates meeting the requirements of their province. The informal process may be completed faster and involves less court participation.

 STEPS TO THE PROBATE PROCESS

  • Determine if the decedent has a will or a specific plan for how the estate will be settled.
    • Canada provides a Vital Statistics Agency where the decedent might have registered his will, as well as notice of where he put it for safekeeping
    • If there is a will, Canada’s Estate Administration Act requires you to send a copy to all the decedent’s beneficiaries and heirs.
  • List all assets and review all financial records. Complete a search for unknown accounts and property.
  • Upon review of the decedent’s estate, determine probate qualifications and procedures.
  • Determine if an Application for Certificate of Appointment must be completed.
    • If so, complete the document and serve the appropriate parties with the required documents.
  • The executor/administrator’s job duties will vary from province to province, but they will be responsible for completing the probate process. Duties may include:
    • Collecting all assets known and unknown for inventory.
    • Canceling daily routines such as leases, utilities, prescriptions, employment, and postal mail.
    • Paying any and all outstanding debts and claims.
    • Investigating and validating all claims made by heirs, creditors, or other parties.
    • Determining the shares of the estate due to heirs as indicated by will or by provincial regulations if necessary.
    • Continuing to pay any ongoing bills such as mortgages and utility bills.
    • Continuing to check in with the court and file any necessary paperwork.
    • Filing tax returns and paying income and estate taxes.
    • Upon receiving permission from the court, distributing estate to heirs.

Again, it is important to recognize that the probate process is complex and lengthy. It may be important to hire an attorney to ensure all probate procedures are properly and successfully completed. This list of the steps of the probate process is intended for general guidance only.

You also do not need probate to transfer assets that have a named beneficiary. These assets include RRSPs, RRIFs, life insurance policies, pensions and some other assets. When the owner of the asset passes away, you only need to provide a Death Certificate and some information in order to transfer that asset to the person who is named.

Because of these rules, it’s quite possible, and in fact is the norm, that a husband and wife can set up their financial affairs using joint property and beneficiary designations so that when one of them dies, the other one does not need to go through probate.

For anyone who is not in that situation, and whose assets are not all going to pass to someone automatically due to joint tenancy or beneficiary designation, the question of whether probate is needed is going to depend at least partly on the type of asset they own.

If you own real estate in your own name alone, or if you own it as a tenant-in-common, your executor will need a Grant of Probate to transfer or sell your property.

If you have assets that will form part of your estate after you die, such as life insurance policies and RRSPs that name your estate as beneficiary, your Executor will need to get probate. This also applies to any assets held in your name alone, such as a bank account, investment, or expensive personal items (e.g. art collection).

If you have a significant amount of money in your estate, your Executor will need probate before he or she can gain access to it.

LEGAL WILLS

All wills must be in written form in Canada, but some provinces, including Alberta, accept handwritten or holographic wills. These do not require witnesses, but two disinterested individuals must witness and sign all other wills. If one of your witnesses is also a beneficiary, she cannot receive her bequest. The legal age for making a will in most states and provinces is 18.

LOCATING THE WILL

Under Canadian law, you do not need a special court order to check the decedent’s safe deposit box for his will. You can take a copy of the death certificate to the bank where you believe he stored it and bank personnel will open the box. If you’re the named executor, you and the banker will inventory the box’s contents and he will give you the will. Canada also provides a Vital Statistics Agency where the decedent might have registered his will, as well as notice of where he put it for safekeeping. After you locate it, Canada’s Estate Administration Act requires you to send a copy to all the decedent’s beneficiaries and heirs. Heirs are the family members who would have inherited if he had not left a will.

LAWS AFFECTING FAMILY MEMBERS

After the executor has submitted a will for probate, Canada allows the decedent’s immediate family members to petition the court to have it changed. Under the Wills Variation Act, applicable in most provinces, the spouse or any child of a decedent can object to the terms of a will if it disinherits them or if they feel the decedent didn’t adequately provide for them. In most cases, marrying after you write your will invalidates it. If you divorce, your decree voids any provisions or references you made to your spouse.

PROBATE ASSETS

Canada does not require all wills to pass through probate. Most states and provinces offer probate exemptions if the value of the decedent’s probate property does not exceed a certain amount. The amount varies from jurisdiction to jurisdiction. Probate property generally excludes assets held with another individual as joint tenants, pay-on-death accounts, and insurance and retirement accounts with named beneficiaries.

TAXES AND OTHER FEES

Canadian provinces impose probate fees based on the value of the decedent’s probate assets before the executor pays any debts or expenses of the estate. This fee can be anywhere from .5 to 1.5 percent. If you’re the executor of a complicated estate and you’re not comfortable handling its administration on your own, you can hire an attorney at the expense of the estate. Canada does not have an estate tax, but the decedent’s estate is responsible for paying tax on any income generated after his death.

Please remember that family members typically are not obligated to pay the debts of a deceased relative from their own assets when the decedent was solely responsible.