That is, if the assets do not form part of the estate upon the death of the deceased, then Probate Fees are not payable with respect to those assets. The main things to watch out for here for blended families, taxes on RRSP/RRIFs, as well as situations where children are still under 19 or not yet financially responsible, or beneficiaries are disabled. We have a probate fee calculator here to help you approximate what the probate fee will be. If the deceased person was married and owned most everything jointly, or did some planning to avoid probate, a probate court proceeding may not be necessary. For children and young adults, it includes trusts so that funds are available for children’s needs while they are growing up and then gets paid out to them when they are old enough to be financially responsible. TFSAs are similar to life insurance in that it has no tax consequences for the estate and is initially received by the beneficiaries tax free. If the value of the estate exceeds $25,000, Probate Fees must be paid in order to obtain “a Grant of Probate” or “Grant of Administration.” However, it is possible to minimize or eliminate Probate Fees if you plan ahead. Limiting the assets to save on probate fees was not justifiable in the decision in Re Sadler Estate, (1991) 114 N.B.R. Changing ownership of property is like selling it, and any capital gain will need to be reported and tax paid. Heritage Law provides full estate probate services in West Vancouver, Vancouver, Dunbar, Kerrisdale, Burnaby . We can find high powered help for complex estates (still at sensible fees) or even lower fees for normal estates – just give us a call on 03 300 12 300.Best saving to date is 94%.. Our job is to be sure you do NOT pay through the nose! Before the court will issue the probate grant, probate fees must be paid. If the parent wants to sell, they will need the child to sign. In between $25,000 and $50,000, the fee is 0.6%. Before determining whether Benjamin Franklin was wrong or not, we need to define what are Probate Fees and when the Fee must be paid. Set up a trust. Get legal advice to avoid delay. Where the gross value exceeds $25,000, probate fees are: There is also an administration (filing) fee of $200 for estates with a gross value exceeding $25,000. AvoidProbate.ca helps you avoid the exhausting, expensive, and time-consuming probate process. The Insurance Corporation of BC (ICBC) has a helpful Checklist for Estate Transfers (pdf). If the value of the estate exceeds $25,000, the following amounts have to be paid as probate fees: 6% of the value of the estate in excess of $25,000 up to $50,000; and 4% of the value of the estate in excess of $50,000. No one else is hurt by the spouse getting the property. (2d) 262 and 41 E.T.R. Call 1-844-667-7628 Assuming the person was a BC resident at their death, probate fees apply to the gross value of the estate which passes to the executor under the Will, and normally includes things like home, other real estate, vehicles, furnishings and personal effects, bank accounts, investments. Was he wrong in not including Probate Fees to one of the things that are certain in this world? In most cases, the company forms are used. What to do when there is a death in the family? 220 – 545 Clyde Avenue West Vancouver, BC V7T 1C5. For example, if a house was owned by the deceased in joint tenancy with another person, then the ownership of the house will pass to the other joint tenant without forming part of the estate. When working with a lawyer, you can discuss the good ways to reduce probate fees and ditch the rest. Other provinces, like where I live in Ontario, have higher probate fees. We frequently are asked about placing assets in joint tenancy with a family member to avoid probate fees later on. And for amounts over $50,000, the fee is 1.4%. Avoiding British Columbia Probate Fees In British Columbia, when the Supreme Court of British Columbia grants probate (or proof) of a will, the government collects a tax, called probate fees. Minimizing fees. When does joint ownership make sense? For a spouse, there is also the option to name the spouse as the successor holder (instead of beneficiary) so that the spouse can continue to have tax free growth in the TFSA. However, there are many pitfalls to the above methods and your Estate Planning strategy must be carefully planned and executed. The basic fee is waived if the value of the estate does not exceed $25,000. Instead of an executor, it has an insurance trustee. The Probate Department (Brokers) Ltd Help & Savings 03 300 102 300. In some cases, however, planning to avoid probate can be so zealous that the estate has no money available to pay income tax or other estate-related costs. To get probate, a probate application is made to the BC Supreme Court, and this is usually done by filing a set of documents with the court. It costs more to do up front, needs to be thought through fully for tax and other issues, and has ongoing administration requirements, but trusts can solve problems of other strategies. Protect your Estate from Probate Fees for Free. What is probate, and what are probate fees? … Notarial wills in Quebec have no probate fee. laws. 222. Probate Fees The provinces each have different fee structures. Estates in excess of $250,000 in Alberta, Northwest Territories and Nunavat have a flat fee of $400. In BC and Ontario, probate fees are based on the size of the estate. Thanks to a recent change in BC’s estate laws, business owners can now reduce the amount of probate fees payable by their estate by utilizing a second will. Children under 19 (or not yet financially responsible) – for children under 19 years old it is not a great idea to designate them directly on the usual designation forms either as primary or contingent beneficiary – because a trustee is needed (if not named, or if the named person is deceased or unable to act, the Public Guardian and Trustee would manage the funds normally) and, even if a trustee is properly named, all funds would have to be paid out at age 19. Or, maybe a certain property is left to a spouse in joint ownership, but other things are left to children. My child lives with me and doesn’t want to visit his father. Currently in British Columbia, no probate fees are payable if the value of the estate does not exceed $25,000. In BC, probate fees are calculated at a rate of approximately 1.4% of the value of all assets in BC and, if the deceased was ordinarily resident in British Columbia immediately before death, also on the value of intangible personal property (such as bank account funds, stocks and other securities) wherever located. Joint ownership of vehicles not only avoids probate fees, but may also make the transfer of the vehicle less complicated. This fee is known as the "probate fee" and is based upon the value of the estate: If the value of an estate is less than $25,000, no probate fees are payable. If properly constructed, Trust assets held in trust will not be subject to Probate Fees. Contact. Generally, Probate Fees are payable on the value of the assets that form part of the estate of the deceased. This works because the law presumes that anything a person puts jointly with their spouse is intended as a gift to them, and the tax system is generally favourable to leaving property to a spouse. In BC, only the death certificate is required to transfer the vehicle to the surviving joint owner. This probate calculator helps calculate BC probate fees. If it is a joint account, the child will be able to withdraw funds from it. This fee is known as the "probate fee" and is based upon the value of the estate: If the value of an estate is less than $25,000, no probate fees are payable. We have created our own probate fee calculator that you can use to estimate the estate administration tax that will be paid out from your estate depending on where you are located in Canada. Beneficiary designations can be a great tool, whether it is for life insurance, RRSP/RRIFs, or TFSAs. If the children are going to be named as contingent beneficiaries on the RRSP/RRIFs, you want to make sure there is enough other money in the estate itself to cover the tax bill. I was too desperate then, almost close to breakdown after getting the runaround from two other family law firms. If a person transferred their property to a trust during their lifetime, they don’t own it anymore so it is not a part of their estate. In British Columbia, the basic fee to apply for probate is $200. By: Tommy Chan The Wills, Estates and Succession Act (“WESA”) allows the use of multiple wills in BC. Write a Living Trust. Think of the cost-benefit, the value of your assets and the needs of your family. What should I do? Pay any probate fees. Step 4. Such planning not only potentially contradicts the testamentary wishes of the deceased, but can also overemphasize the income tax burden. The articles of most private companies allow for the transfer of a deceased shareholder’s shares to the estate without probate. Grandchildren – If life insurance is left equally to children on the company forms, and one of the children dies before the parent, that child’s children will not inherit their share the way they normally would in a Will. Because RRSPs are tax deferred, at death it’s time to pay the piper. The same kind of things I said about life insurance apply to TFSAs. We help clients protect their families, their assets and their legacies. If the value of the estate exceeds $25,000, the following amounts have to be paid as probate fees: Don’t worry, we have created a Probate Fee calculator to do the math for you. Joint ownership. BC and Ontario. When you have life insurance, RRSP/RRIF, or TFSA, you can name a beneficiary or beneficiaries (or successor subscriber for a TFSA) on forms provided by the company, or you can do a separate document with a lawyer. What do probate fees apply to and not apply to? The good news is that with some simple planning, they can be avoided. The most common type of asset that does not form part of the estate are assets held in joint tenancy. It’s part of the estate.” The parent is no longer around to say what she really wanted. Where the gross value of all real and personal property situated in British Columbia subject to probate does not exceed $25,000, there is no probate fee. has one of the country’s lowest top marginal tax rates and one of the highest probate tax rates. A lawyer drafted insurance or plan declaration is the better approach. British Columbia’s Probate Fee Act sets out the rules for the rate of probate fees payable on a deceased estate and when they must be paid. A  Trust is created by transferring property to a trustee to manage the property held in trust for the beneficiaries. But until WESA came into effect, there was a question as to whether that approach worked in BC because of the particular wording of the previous governing legislation. Other provinces, like where I live in Ontario, have higher probate fees. A Trust is a relationship where a person holds property for the benefit of others. The insurance trustee receives the life insurance, probate free, from the insurance company and then handles the funds as set out in the Insurance Declaration. By: Tommy Chan The Wills, Estates and Succession Act (“WESA”) allows the use of multiple wills in BC. You will also have to submit an affidavit that declares you are the named executor and a declaration that all beneficiaries have been notified of the will. If the child has a spouse and then separates, the child’s spouse could have a claim to a portion of the parent’s property. More specifically, there is no probate fee for the first $25,000. But the other children have to bring a lawsuit to deal with it. Probate fees do not apply to assets that pass directly to someone ‘outside the will’ because there is a separate legal mechanism other than the Will which gets it to the person it is going to. Insurance Declarations are also a great tool for disabled beneficiaries, as it can include life long trusts for them. In BC, probate fees are 1.4% of the value of probateable assets. For more information on related topics, please see the following: The best lawyer I ever met. Great weather, like avoiding probate … Legal … Other time it opens the door to problems down the road, like lawsuits whose costs will quickly outweigh that 1.4% you were trying so hard to avoid. Add in the cost of legal and accounting fees, and the average cost of probate is approx 5%. Therefore, if you have a life insurance policy and designated someone other than your estate as the beneficiary, the proceeds of the policy will not be subject to Probate Fees. For example, avoiding triggering a taxable capital gain which can be taxed at as much as 22% makes little sense to avoid a 1.4 % probate fee. If the RRSP is designated to a spouse, then the spouse can take it on a rollover basis, which means the tax only needs to be paid when the spouse dies down the road. If the estate has a value of less than $25,000, you don’t have to pay this fee. I have referred several clients to M.J. over the past year. A little more on joint ownership and beneficiary designations, keeping in mind there are lots of nuances that can’t be covered in a single blog post: More than any other probate fee reduction strategy, joint ownership is the one that most often makes me want to tear my hair out. If a person jointly owns property with a spouse in a blended family, the main risk is disinheriting children you actually want to take care of. The trust deed or trust agreement will say how the property is to be used during the person’s lifetime, and how it will be distributed when they die. purpose of avoiding probate fees will not succeed. ). Whether a will needs to be probated or not depends on the agencies and financial institutions that hold assets within an estate – they may require that a will is probated before the assets are distributed or accessed by anyone. For example, if a person really wanted their spouse to get the home in joint tenancy to keep for themselves, they might make their life insurance go to their adult children instead. If the estate has a value of less than $25,000, you don’t have to pay this fee. If each person has children from a previous relationship, they may say to each other “I’ll leave everything to you, and we’ll promise to equally divide everything among all of the children when the last one of us dies.” Problem: the surviving spouse could change their Will at any time to remove the other’s children, and step-children have no rights to a step-parent’s estate. But even then, the fees are just 1.5% on estates exceeding $50,000. As a general rule, probate fees are equal to approximately 1.4% of the gross value of a deceased’s estate, calculated as of the date of death, and must be paid before the Court will issue a Grant of Probate. British Columbia’s Probate Fee Act sets out the rules for the rate of probate fees payable on a deceased estate and when they must be paid. For example, some people will put significant amounts or all of their money into joint accounts bank accounts with right of survivorship with one of their children to avoid probate. 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