Although different provinces have slightly different rules, probate is basically the court process of validating your Will so third-parties (such as financial institutions) can be certain they are dealing with a valid document and taking instructions from the right person (the executor you've chosen). This ensures your wishes, as outlined in your will, can be carried out. This includes the distribution of your assets – like property and investments. But many people don't want their families to go through the public and, many times, lengthy probate process if it can be avoided.
If you understand how probate works in your province, you can put estate strategies in place to potentially avoid probate. Your advisor can work with you, your lawyer and your tax professional to determine what may work best for your situation.
Generally, an executor, with the assistance of a lawyer, makes an application to the probate court by submitting:
- The deceased's original Will
- Proof of death (such as a death certificate)
- Court forms (which may include an inventory of assets and their value and proof that interested parties have received notice of the application for probate)
- Applicable fees or estate administration taxes
Some of the responsibilities of the executor include:
- Reviewing and creating an inventory of assets and debts
- Continued management of property and pay any outstanding debts
- Preparation of final tax returns and complete other record keeping
- Making final distributions to beneficiaries
It's important to remember that every province has different rules and processes for probate. Talk to your lawyer to learn more about how probate may look where you live.
Are there any assets that don't need to go through probate?
Some types of property (often called non-probate assets) pass automatically to specific beneficiaries without a court’s involvement. For example, if you name beneficiaries on assets including Registered Retirement Savings Plans (RRSPs), Tax Free Savings Accounts (TFSAs), insurance policies and annuities, they likely won't have to go through probate. In addition, assets that are titled in certain ways (like "joint with right of survivorship") may not need to go through probate.
Are there disadvantages of probate?
The probate process is intended to help provide some certainty on how your estate is handled after your death. But with that certainty come some potential disadvantages, including:
- Probate is public – The court proceedings are public record, and in many cases, a notice to creditors is done through a public medium, like the local newspaper
- Probate can be costly and time-consuming – Depending on where you live, probate fees can be up to 1.5% of the estate's value, which does not include legal and other professional fees. And because it's a legal proceeding, provincial law determines how long this process may take
How we can help
No matter what your estate includes, we believe it's important to understand how your assets will be passed down to your beneficiaries. This includes gaining a high-level understanding of the probate process. With your team of legal and tax professionals, your Edward Jones financial advisor can answer questions you have to allow you to make informed decisions regarding your estate strategy.
Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice. You should consult your estate-planning lawyer or qualified tax advisor regarding your situation.