What Is Probate?

Probate is the process of legally establishing the validity of a will.   As a result, the Court confirms the appointment of an Estate Trustee (or Executor).  The Estate Trustee administers and distributes the estate of the deceased person.  An Estate Trustee may be appointed with or without a Will.  If there is a Will, the Court issues a Certificate of Estate Trustee with a Will.  If there is no Will, the Court issues  a Certificate of Estate Trustee Without a Will and the estate is distributed according to Ontario’s intestacy laws.  When a person dies without a Will, they are said to have died “intestate”.

When Is Probate Needed?

If there is no Will, having a Certificate of Estate Trustee Without a Will issued will be required before any assets can be dealt with or distributed.  If there is a Will, whether or not probate will be required is determined by the types of assets the deceased owned and their value.  For example, if the deceased owned real property in Ontario, whether as the sole owner or as a tenant in common with another person(s), probate will be required to transfer the real property (or the deceased’s share of the real property) to a beneficiary.  If the deceased owned shares of a publicly-held corporation, probate will be required before the shares can be transferred. 

To transfer assets held at a financial institution to a beneficiary, the Estate Trustee must satisfy the requirements of that institution.  The maximum value of assets that may be transferred without probate varies with each financial institution.  If probate is not required, the financial institution generally requires certain documents be signed before releasing such assets.

Calculating Probate Fees

If probate must be obtained, probate fees are payable by the estate to the Court.  The amount is based on the value of the estate.  In Ontario, the fees are $5 per $1,000 on the first $50,000, plus $15 per $1,000 of estate value over $50,000.  There is no maximum.

In an upcoming blog, we will discuss how an insurance trust declaration can help avoid probate fees.

This entry was posted on Friday, December 18th, 2009 at 12:29 pm and is filed under Avoiding Probate, Calculating Probate Fees, Estate Planning, Executor, Probate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.