Probate Fees – Planning to Avoid Them
In Ontario, an estate becomes liable for probate fees when the estate trustees apply for a Certificate of Appointment. Depending on the value of the estate, these fees can sizeable and cannot by set off by debts owed by the Deceased or estate-related expenses.
The main reason probate is required is because the estate trustees will require proof of authority before they are permitted to deal with certain assets. For example, generally speaking, banks will not release funds to estate trustees unless they have a Certificate of Appointment. Similarly, estate trustees will usually not be able to transfer real property into their names, list it for sale, or enter in to an agreement of purchase and sale without the Certificate of Appointment. Luckily, not all estates require a Certificate of Appointment to be administered. If the estate trustees can avoid applying for probate, then they can avoid paying probate fees.
There are several planning techniques that can be used to avoid the necessity of a Certificate of Appointment and, thus, paying probate fees:
- Making inter vivos transfers of property – if you give it away prior to death, it won’t form part of your estate;
- Making more than one Will – in one Will you deal with assets that will not require probate, while in the other Will you deal with assets that will;
- Making RRSPs, RRIFs, and insurance policies payable to a named beneficiary, rather than your estate; and Transferring property into joint ownership.
By giving some thought to how you structure your estate, it might be possible to save a significant amount of money on probate fees – or avoid them all together.
Thanks for reading,
Megan F. Connolly