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IntroducingNavigating Probate and Estate Administration in Canada

Probate is the legal process by which a court verifies that a deceased person's will is valid and that their assets are distributed according to the will or the laws of intestacy if there is no will. Estate administration is managing and distributing a deceased person's assets and settling their debts after death.

The process of probate and estate administration varies by province but generally involves obtaining a grant of probate (a court order that confirms the validity of the will) and then using that grant to transfer ownership of the deceased person's assets to their beneficiaries.

What assets are not subject to probate in Canada?

Assets that are not subject to probate in Canada are those that do not form part of a deceased person's estate. These include assets that are jointly owned or that have named beneficiaries, as well as assets that have a specific provision for passing outside of the will such as:
  • Assets held in joint tenancy with the right of survivorship, where the surviving joint tenant automatically becomes the sole owner of the asset after the death of the other joint tenant.
  • Registered retirement savings plans and registered retirement income funds have been named beneficiaries.
  • Life insurance policies that have named beneficiaries.
  • Payable-on-death bank accounts, allow the account holder to name a beneficiary who will automatically receive the funds in the account upon the account holder's death.
  • Transfer-on-death securities accounts, allow the account holder to name a beneficiary who will automatically receive the securities in the account upon the account holder's death.
  • Property held in a living trust, which passes to the beneficiaries named in the trust document upon the death of the trust creator, rather than through a will or probate.
  • It's also worth noting that some provinces in Canada have laws that allow for small estates to bypass probate, meaning that the estate administration process is not required for smaller estates, which can help to simplify the process and minimize expenses.

What is the process of probate in Canada?

The process of probate in Canada varies by Province, but below are some of the ways the process of probate plays out in Canada:

The executor or administrator of the estate must obtain a death certificate before they can begin the probate process.

The executor or administrator must identify and inventory all of the assets that are part of the deceased person's estate.

The executor or administrator must apply to the court for a grant of probate, which is a court order that confirms the validity of the will and confirms the executor's authority to manage and distribute the assets of the estate.

The executor or administrator must notify the deceased person's creditors and settle any outstanding debts before distributing the assets to the beneficiaries.

The executor or administrator must ensure that all taxes, including income taxes and estate taxes, are paid before distributing the assets to the beneficiaries.

The executor or administrator must distribute the assets of the estate according to the terms of the will or, if there is no will, according to the laws of intestacy.

Once the probate process is completed and the court is satisfied that the estate has been administered properly, it will issue a release and discharge to the executor or administrator, which releases them from further liability and concludes the probate process.

Do bank accounts with beneficiaries have to go through probate in Canada?

Bank accounts with beneficiaries do not have to go through probate in most cases. This is because the account is considered to be a "non-probate asset" which means that it passes directly to the beneficiary, bypassing the probate process.

This is true for bank accounts that are set up as payable-on-death " (POD) accounts, where the account holder can name a beneficiary who will automatically receive the funds in the account upon the account holder's death. Once the bank is presented with a death certificate and proof of the beneficiary's identity, the bank will release the funds to the beneficiary directly.

It's worth noting that this only applies to the funds in the POD account and does not include other assets of the deceased person's estate such as real estate, investments or other bank accounts that are not set up as POD.

Probate Canada checklist

The probate process in Canada can be complex and time-consuming, and it's important to have a checklist of tasks to ensure that everything is done correctly and in a timely manner. Here is a general probate checklist that can guide you through the process:
  • Obtain a death certificate: This is the first step in the probate process, as it is required to open the estate and begin the probate process.
  • Identify and inventory assets:Make a list of all the assets that are part of the deceased person's estate, including real property, personal property, bank accounts, investments, and any other assets that the deceased person owned individually.
  • Locate the will:If there is a will, it must be located, and its authenticity must be verified.
  • Apply for a grant of probate:The executor or administrator of the estate must apply to the court for a grant of probate, which is a court order that confirms the validity of the will and confirms the executor's authority to manage and distribute the assets of the estate.
  • Notify creditors and settle debts: Notify the deceased person's creditors and settle any outstanding debts before distributing the assets to the beneficiaries.
  • Pay taxes:Ensure that all taxes, including income taxes and estate taxes, are paid before distributing the assets to the beneficiaries.
  • Distribute assets: Distribute the assets of the estate according to the terms of the will or, if there is no will, according to the laws of intestacy.
  • Close the estate: Once all the assets have been distributed, and all debts and taxes have been paid, the executor or administrator must file the necessary paperwork with the court to close the estate.
It's worth noting that this is just a general checklist and that the process can vary depending on the province, the assets and liabilities of the estate, and whether there are any disputes among the beneficiaries. It's always recommended to consult with a legal professional to ensure that you are following the correct process.

What assets are subject to probate in Canada?

Assets that are subject to probate in Canada are those that form part of a deceased person's estate and are not automatically transferred to a beneficiary or joint owner upon death. These assets may include:
  • Real property, such as a house or land
  • Personal property, such as furniture, jewelry, and cars
  • Investments, such as stocks, bonds, and mutual funds
  • Bank accounts and other financial accounts that are not set up with a payable-on-death or transfer-on-death beneficiary
  • Business interests
  • Certain types of trusts, depending on the type and the terms of the trust
  • Any other assets that the deceased person owned individually and that do not have a specific provision for passing outside of the will or probate.

It's important to note that, while probate is required for these assets, the executor or administrator of the estate can still distribute these assets to the beneficiaries according to the will or the laws of intestacy, once they have obtained a grant of probate.

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

The value of an estate that triggers the need for probate varies by the province in Canada. In some provinces, there is a monetary threshold below which an estate does not have to go through probate, this is known as a "small estate" or "summary administration" and the threshold can be as low as $10,000 or as high as $50,000.

However, in other provinces, there is no monetary threshold, and all estates, regardless of their value, must go through probate. Additionally, even if an estate falls below the threshold, probate may still be required if the estate includes assets such as real property, or if there are disputes among the beneficiaries.

It's important to note that even if probate is not legally required, the executor or administrator of the estate may choose to go through the probate process, especially if there are any uncertainties or disputes that need to be resolved by a court.

It's also important to consult with a legal professional in your Province, as the rules and process can vary.

What happens after probate is granted?

After probate is granted, the executor or administrator of the estate is authorized by the court to manage and distribute the assets of the estate according to the terms of the will or, if there is no will, according to the laws of intestacy.

The first step the executor or administrator will take is to notify creditors and settle any outstanding debts of the estate. This is important because the executor or administrator is personally liable for the debts of the estate, and therefore, it's important to make sure that all debts are paid before the assets are distributed to the beneficiaries.

The next step is to pay taxes, including estate taxes, income taxes, and any other taxes that might be due. The executor or administrator must ensure that the taxes are paid before distributing the assets to the beneficiaries, as taxes must be paid from the estate's assets and not from the beneficiaries' shares.

Finally, the executor or administrator must distribute the assets of the estate according to the terms of the will or, if there is no will, according to the laws of intestacy. This includes transferring ownership of the assets to the beneficiaries, as well as providing them with any documents or information they need to take possession of their inheritance

After all these steps are completed and the court is satisfied that the estate has been administered properly, it will issue a release and discharge to the executor or administrator, which releases them from further liability and concludes the probate process.

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