What is Probate and When Might your Will be Required to be Probated
Probate is the procedure under which the court confirms the validity of your Will, that it is your last Will and testament, that your named Executor has authority to deal with your assets and make distributions to your named beneficiaries according to the terms of your Will.
Probate fees are the registration costs charged by the Court. For British Columbia, the probate fee is charged on the gross value of the total of your real and tangible assets situated in B.C. and your intangible assets (like your bank accounts, stocks and bonds). The fee payable is:
- 0.6% of the gross value of your estate exceeding $25,000 but not more than $50,000, plus
- 1.4% of the gross value of your estate exceeding $50,000.
There is also an administration (filing) fee of $208 (2010) for estates with a gross value exceeding $25,000
There is no legal requirement to probate your Will. If third parties accept your Will and are willing to deal with your Executor and transfer your assets without a probate order, then there is no need for your Executor to probate your Will. Your Will may have to be probated where:
- somebody challenges the validity of your Will or chooses to file a Wills Variation Act Claim (this would likely occur if there is a disgruntled person feels you did not make adequate provision for them);
- a third party (like a Financial Institution) that administers some of your assets requires probate to make sure that they are dealing with the correct Executor and your correct Will so they are relieved of liability in permitting the transfer of your assets out of your name to the name of the Executor to then distribute. This is likely where you have:
- a stock and bond portfolio with an account value worth more than $100,000,
- if you have a bank account with a balance of $100,000 or more), or
- an RRSP/RRIF without a beneficiary designated or the beneficiary predeceased you;
- you own certain assets that just simply requires probate for their transfer out of your personal name – like your automobile and your real estate.
Other assets may not require probate of your Will. For example, if you own shares of a private company, as long as your family members/directors do not dispute your Will, those other family members/directors can simply approve a transfer of your shares to your Executor or to the beneficiaries named in the Will. This is a simple matter of internal corporate procedure. So it can be an advantage to hold assets in your company if your Will is unlikely to be contested where the shares are to be dealt with in a separate Will that won’t be probated.
There are ways to avoid probate such as:
- giving away your property while you are alive;
- holding your property in joint names as joint tenants with right of survivorship;
- use of multiple Wills;
- use of life insurance and segregated funds that pass through operation of law to the named beneficiary; and
- assets held through a Trust.
In other articles on this website, we will discuss these probate minimization techniques.
The Next Step
To help develop your estate plan, please contact me, Steve Nyvik. I will work together with your estate planning lawyer to help custom design and implement your estate plan. Estate Planning is provided as no extra charge service to Lycos Asset Management Inc. clients that I service. You can call me (604) 288-2083 (x2) or email me at Steve@lycosasset.com
Written by Steve Nyvik, BBA, MBA ,CIM, CFP, R.F.P.
Financial Planner and Portfolio Manager, Lycos Asset Management Inc.