probate fees

Keep Probate Fees in Perspective

In Canada, we don’t have a “death tax,” where significant taxes must be paid on the transfer of wealth at death. Consider that in some countries like the U.S. or Japan, estate tax can reach rates of up to 40 and 55 percent respectively!1 Yet, over the years, probate fees have become a de facto estate tax.


Estimated Probate Fees on a $1M Estate Value by Province
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Probate is the process by which a court confirms the validity of the will of the deceased individual. This declaration allows estate representatives and institutions to proceed on the basis of the instructions detailed in the will, without worry of future disputes. The fees vary by province — in most cases, based on a percentage of the value of the estate.

Strategize to Minimize Estate Fees

It may make sense to try and minimize these fees; after all, not many enjoy giving up their hard-earned wealth to the government. In doing so, a basic strategy would be to pass as many assets as possible to heirs outside of the estate: registered plans and insurance with designated beneficiaries, as well as property registered jointly with rights of survivorship (“joint tenancy”)3, may pass outside of the estate.

Dangers of Minimizing Probate Fees

But keep in mind that there may be dangers involved in trying to minimize probate fees. It could lead to other financial implications or headaches. Particular care must be taken when a beneficiary or joint tenant is not a spouse. For instance, joint tenancy means permanently giving up full ownership of your asset, which may include its control. If a joint tenant encounters financial difficulty, creditors may force the sale of a jointly-owned asset. There is also risk of a falling-out in any relationship, with spouses or others.

Balancing Beneficiaries

There may also be equalization issues. Suppose you have two grown children as your only heirs and you designate Child 1 as the beneficiary of an Registered Retirement Savings Plan (RRSP) in an attempt to bypass probate, leaving the rest of the estate to Child 2.3  When you die, taxes due on the fair market value of RRSP assets will be payable by the estate, potentially reducing the amount for Child 2.

Savings May Come with Tax Consequences

Saving a few dollars in probate fees may result in other taxes. For example, putting an asset such as a house in joint ownership with a non-spouse may save future probate fees, but if they already own a principal residence, they may be subject to capital gains tax on the sale of the property.

Keep Perspective on Probate Fees

At the end of the day, keep perspective: probate fees may be little more than a nuisance in the objective of effectively settling an estate. Contact your advisor to talk about estate planning the best strategy for you.


1 E&Y Worldwide Estate & Inheritance Tax Guide 2018
2At 1/9/19, based on provincial website estate administration schedules
3 Not applicable in Quebec