There are a myriad of things that you have to consider when planning for your end of life.
When planning, despite your best efforts and ensuring all legalities have been followed, your Will may end up having to go through a probate process. To fully understand whether your Will needs to go through this process, you have to understand what happens following your passing.
In this blog, we break down the probate process and how you can ensure that your last Will and testament are appropriately managed following your passing. Let's start with the essentials.
What is Probate?
Probate is the court procedure seeking formal approval of the Will by the Superior Court as the deceased's last valid Will.
A "Certificate of Appointment of Estate Trustee" is received once granted by the Court. The process of applying for the Certificate of Appointment of Estate Trustee (also known as Probate) gives the Executor formal authority to act on behalf of the deceased.
It is important to note: This is also the process, although with slightly different paperwork when there is no will and someone is applying to be named the Executor or estate trustee.
In cases without a Will, someone will need to apply through the probate process to be appointed as the estate trustee. In Ontario, the order in which people can apply for this role is predetermined and would require individuals renouncing their rights and/or consent to the person's appointment applying if the order is not followed.
When is Probate Required?
Probate isn't always required, but it is relatively common for most estates to be probated.
Some examples of estates requiring Probate:
- The Executor wants to validate the Will for their protection
- There is real estate held not automatically rolling to the spouse (minus first dealing exemption)
- Registered Investments without a named beneficiary
- Financial Institutions request it
- No will, need to appoint an estate trustee
- Disputes about who the Executor is, or beneficiaries are unable to consent on their own (people with disabilities or minors)
It is important to note that in many cases, Probate isn't required by any law, but rather the banks where the deceased had assets will require it for their own protection before allowing the Executor to have access to the money.
The reason for this is that without going through the formal court process, the banks assume that the Will they've been given by the Executor is the most recent and accurate Will of the deceased.
How do you file for Probate?
The probate process often involves a lot of paperwork. Besides the application forms, various additional forms may need to be prepared depending on the estate's specific situation.
While the Executor can handle the process without assistance, usually someone with experience administering estates, such as an estate administrator or lawyer, will be hired for this process.
What does it cost?
One of the essential steps in the probate process is calculating the value of the estate. The estate value is calculated as the market value at the date of death on the entirety of the estate.
This cost includes everything from artwork and personal belongings to real estate and investments. The estate's total value is then what is used in determining the estate administration tax that is required to be paid.
Estates valued at less than $50,000 do not have to pay the estate administration tax, and all other estates will pay approximately 1.5% on the value of the estate to the Minister of Finance.
How long does this all take?
The length of time all depends on which Court the application must be submitted to. Applications in the GTA usually have longer wait times than smaller communities.
Typical processing timelines in the GTA vary anywhere from a few weeks to several months. Unfortunately, if you do not like the processing times in your area, you cannot pick and choose which Court to submit your application to. The application must be filed in the Court where the deceased resided.
Now you have an understanding of the process. Looking for more information on the subject or interested in talking to a professional? Connect with our partners at ETP Canada today to learn more.