On the blog this month, we’re focusing on estate administration with topics to help you navigate this sometimes challenging process. The first question that many individuals have after the death of a loved one is whether probate is required. In this article, we’ll walk you through what probate is, when it may be required, and whether you should take steps in the estate planning process to avoid it.  

What is probate?

When people refer to probate, they are talking about the process for applying to court for a Certificate of Appointment of Estate Trustee either with or without a will. A Certificate of Appointment is a court issued form which declares that an individual, or several individuals, are appointed as Estate Trustees of an estate. As an Estate Trustee, an individual will have authority to manage and distribute an estate.

Although the term “probate” has since been replaced with the language of “Certificates of Appointment” it continues to casually be used to refer to this court process.  

When is probate not required in Ontario? 

Probate is not always required to administer an estate. Situations that do not require probate include:

1. All Estate Property Was Jointly Held: If all property was held jointly, all of the assets would pass outside of the estate and probate would therefore not be necessary.  This is often the case of spouses who have each executed mirror wills and who hold bank accounts and real property as joint tenants.  
2. Bank Assets Are A Modest Amount: If the only assets are held in a solely owned bank account, and the amount is modest, the bank may agree to distribute the assets without the need for probate. However, if the bank identifies some risk of there being a challenge to the estate, probate will likely be required to access these funds. 
3. The real property is subject to a first dealings exemption: In Ontario, there exists an exception to the requirement for probate in transferring real property where the transfer is the first dealing of the property since the province transitioned to electronic document registration in the early 2000s. This exemption is contingent on title to the property being classified as Land Titles Converted Qualified or “LTCQ”. A real estate lawyer would need to be consulted to determine if the first dealings exception may apply.  More information about the first dealings exemption may be found here.

Accordingly, the first step in determining whether probate will be required is to compile a list of all of the assets and liabilities of the deceased. From there, you can better understand whether assets can pass without the need for a Certificate of Appointment. 

Is probate required when an estate involves real property? 

No, probate would not be required for real property if the property was held as a joint tenancy. In this case, the surviving owner would have the right of survivorship and can apply for a survivorship application without probate. As well, the first dealings exemption discussed above may also mean that probate is not required. 

How do I avoid probate? 

The first question many clients have in the estate planning process is how to avoid probate. Clients have heard that probate is expensive, takes a long time to complete, and exposes the estate to the dreaded Estate Administration Tax. These are all legitimate concerns, however, it is important to consider the risks and benefits involved in every estate planning decision.  

For example, many people wish to put a home into a joint tenancy with their adult children to avoid probate, only to realize that this exposes the home to potential debt collectors going after the child, may cause the child to lose out on first time home buyer programs, etc. These risks may not outweigh the benefits of saving a mere 1.5% in tax. There are also better tools such as blind trusts that can be explored with your estate planning lawyer.  

Some ways that probate may be avoided include: 

1. Ensuring you have a validly executed will, which will avoid intestate succession;  
2. Placing property or bank accounts into joint ownership; 
3. Executing primary and secondary wills, which is especially important for individuals who own a business;  
4. Setting up blind trusts for real property; and 
5. Ensuring that all accounts that can have a beneficiary listed are appropriately setup, rather than listing accounts to go to your estate. 

How much does an estate have to be worth to go to probate in Ontario? 

The size of the estate is not a relevant consideration in whether probate is required. It just depends upon what the assets of the estate are, and whether those assets can pass outside of the estate. As mentioned, this could be a small bank account if the bank consents, jointly held property, etc. As soon as there is an asset which requires probate to transfer ownership, then a Certificate of Appointment will be required to proceed.  

How long does probate take? 

The time required to obtain probate will depend upon the court location nearest to where the deceased died. Some court locations are processing Certificate of Appointment applications faster than others. Generally it will take between 3-6 months, but this may happen more quickly as court services get back to normal. 

Should you hire a lawyer to file for probate? 

If you determine that obtaining a Certificate of Appointment is required, you may wish to hire a lawyer who can assist with obtaining the Certificate or with certain aspects of the estate administration process. The cost of hiring a lawyer is generally quite modest for these services, with the cost increasing depending upon the complexity of the estate.  

Ontario courts are notoriously picky with rejecting estate forms that are improperly completed, so hiring a lawyer is a great way to avoid the time and headache involved. You will also get access to great advice about everything you need to do as an estate trustee.  

Thanks for reading, and if you have any questions about the probate process, please feel free to contact me.  

Mark Lahn