Myth #1: Probate Takes Years to Complete
Fact: While probate can take time, it doesn’t always take years. In most instances, straightforward estates can be settled in a few months to a year, depending on the complexity of the assets and whether disputes arise. Delays typically occur when the deceased’s will is contested, when creditors make claims, or when the estate’s assets are difficult to value or liquidate. Proper estate planning, including a well-drafted will, can make the probate process significantly more efficient.
Myth #2: Probate is Always Expensive
Fact: Probate fees and costs are typically a small percentage of the estate’s value. In British Columbia, the fee is 0.6% for estates between $25,000 – $50,000 and 1.4% for estates over $50,000. Legal fees and executor expenses can add to the cost, but the idea that probate will drain an estate is mostly exaggerated. In many cases, the expenses are manageable, especially if the estate is straightforward.
Myth #3: All Assets Go Through Probate
Fact: Not all assets are subject to probate. Certain assets bypass probate and go directly to beneficiaries, including jointly held property which passes automatically to the surviving co-owner, life insurance policies, RRSPs, TFSAa and pensions which are paid directly to the named beneficiaries and assets held in trusts that do not go through probate at all.
Myth #4: If There’s a Will, Probate Isn’t Necessary
Fact: Even with a will, probate may still be required to validate the document and grant the executor legal authority to distribute assets. Financial institutions, land registries, and other entities may require a probate certificate before releasing funds or transferring property. However, probate may not be necessary for small estates under $25,000 or where all assets are jointly held or have designated beneficiaries.
Myth #5: Probate Can Be Avoided Completely with Proper Planning
Fact: While it’s possible to minimize probate through strategies like joint ownership, named beneficiaries, and trusts, it’s not always possible or advisable to avoid it entirely. In some cases, probate provides legal certainty and protects executors from liability. For example, probate ensures that debts are paid, disputes are resolved, and the deceased’s wishes are legally validated.
How to Minimize Probate Costs and Delays
Although probate can’t always be avoided, the following steps can help to simplify the process and reduce costs:
- Keep Your Will Updated: An up-to-date will reduces the chances of disputes and challenges that could prolong probate.
- Name Beneficiaries Wisely: Ensure beneficiaries are named on all applicable financial accounts to bypass probate.
- Use Joint Ownership Strategically: Consider joint tenancy for property and bank accounts, but be aware of potential legal and tax implications. These can especially be a concern when adding children or other people who are not spouses onto property or bank accounts.
- Consider Trusts: Establishing a living trust can help you transfer assets outside of probate while maintaining control over your estate.
- Consult with Professionals: Work with an estate planning lawyer and financial advisor to create a comprehensive plan tailored to your circumstances.
Conclusion
Probate is often misunderstood, leading to unnecessary misconceptions. It’s not always lengthy, expensive, or entirely avoidable, and it serves an important legal function in validating wills and protecting executors. If you’re unsure about how probate laws apply to your situation, consult with an estate planning professional to create a strategy that best suits your needs.
Find out more about our probate and estate administration services and book a consultation here.
Stay up to date with the latest legal scoop by signing up for our newsletter.
Disclaimer: This blog post is for informational purposes only and should not be construed as financial or legal advice. Consult with qualified professionals to create a personalized estate plan suitable for your specific circumstances.
