Probate court validates a Will. Photo by Marco Verch

The reality of death, taxes … and probate

By  Catholic Register Special
  • November 2, 2019

Your death may be end of life, but it’s not the end of the bills. Aside from burial costs and cleaning up the monthly household bills, the executor of the estate will usually be faced with probate fees.

Probate is the legal process that validates a Will and gives the executor of the estate the legal authority to carry out the terms of the Will. 

The process starts with the estate trustee filing documentation to the probate court to validate the Will and pay an estate administration tax, or probate fee. The fee varies from province to province, but generally is a percentage of the total value of the estate.

Depending on the nature of the assets and how the estate was set up, not all Wills necessarily have to go through probate. For instance, if the assets of the estate were jointly owned and passing to a surviving spouse, or a parent has only one child who is inheriting the entire estate. 

However, most estates go through probate because it may not be possible for the trustee to take over the role of managing or distributing the estate assets until the appointment is granted by the courts. Likewise, probate offers an opportunity to settle the deceased individual’s Will through a neutral court. Estate issues can be sensitive, so it is sometimes better to let the courts make the final decision when there is a dispute.

Still, there are ways to minimize probate fees, though they should be carefully planned. First, there are assets that can be left outside of the deceased estate because they are designated directly to beneficiaries such as pensions, a registered retirement savings plan (RRSP) a registered retirement income fund (RRIF) and life insurance.

Having multiple Wills to divide assets as to what requires probate and not is another way to minimize probate fees. Others set up trusts so that the assets will be dealt with under the terms of the trust rather than form part of the estate. Taking out an insurance policy to cover estate costs is another way to do it.  A person can name his / her estate as the beneficiary.  The estate will pay probate fees on the insurance proceeds, but it gives the estate the cash to cover the fee, pay debts, taxes and other obligations. 

Every situation is different and unique. There are circumstances where probate might work to one’s advantage and others where it can be avoided or minimized. It is best to get professional help from a financial advisor or lawyer to discuss specific situations and options and the potential use of strategies to manage probate fees.

(With files from the Development Office of the Archdiocese of Toronto.)

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