Table of Contents

What is Probate?

Seeing the term Probate, many people might think this is an area only Estate Professionals should traverse, but they are wrong. Everyone who has property and responsibilities should know about Probate and its process. The earlier in his life, he comes to understand it, the better.
Probate is a document issued by the court stating that the will (attached to that document) is valid and registered with the court. It also mentions the names of the executors who, in the court’s judgement, are entrusted with administering the state.
The term probate can also refer to the process of court-supervised administration, by which an executor, the personal representative is authorized to collect the assets, utilize them to pay taxes, debts, and administration expenses, and allocates them to beneficiaries.

Why is Probate Significant?

  • The probate process is necessary because it establishes the legal authority of the executor or administrator to approach relevant institutions where the deceased’s assets lie, collect them, including all the deceased’s properties, and ultimately distribute them.  
  • Moreover, the probate process involves appraising the deceased’s estate, which is essential for tax purposes. Any inheritance without paying estate tax to the state will be irregular or unlawful.  
  • An estate needs probate when the property is only in the deceased’s name, to transfer it to the beneficiaries. In the absence of probate, disputes can arise.  
  • Suppose the accounts or securities are in the deceased’s name. In that case, the financial institutions will demand that you produce the probate document to release the funds to you as the executor.  
  • Even when an exception applies, if a bank where funds lie demands probate, then probate is mandatory. However, if the bank agrees, it will require the submission of indemnity bonds to ensure the bank doesn’t have to worry about any future claims.  
An executor (also called personal representative) is anyone who has the duty of fulfilling the provisions (of disposal, payment of taxes and distribution etc.) pertaining to an Estate, after the owner’s death. Most common choice as an executor is either a close relative, personal advisor, a lawyer or a trustee. An executor’s nomination occurs either through a will, or a court can appoint one, in certain circumstances.

When to File for Probate?

Delay benefits no one. It may take some time to gather facts and manage the grief, but one should move an application for probate as soon as possible. The sooner it happens, the less legal complexities it will have. Also, the estate will go into administration at the earliest. 
All the steps in the probate process are equally vital. All the steps need due diligence, from collecting documents and filing applications to assessment, distribution, and estate closure. Three significant stages are involved in the Probate process:

The Opening:

The Opening includes the following steps:
Probate Opens at the filing of a petition in the competent court.
Typically, an executor will be a person named in the will. However, the court itself appoints an executor when: 
If the probate is to be formal (supervised by the court), there will be a short hearing at the beginning. However, a hearing is not required if probate is informal (unsupervised). 
According to laws, most provinces in Canada do not require a lawyer to file for probate. However, you need one if your estate is large and complex or has unsettled issues. Most executors find it more convenient to have one. 

Notice to Creditors

It is a vital part of the probate process. This step ensures that the executor pays off all debts, liabilities, and taxes before he distributes the estate. 
An executor should issue notices to known creditors through the usual means. However, the executor should advertise for unknown creditors and the public in local newspapers. 
Regulations in many states hold the executor responsible for skipping the issuance of notices. 
In the past, there have been instances where the executor skipped this step out of negligence or to save time and money. The courts in those cases have held the executor personally liable. 
Suppose the executor advertises adequately in the newspapers or serves the notices correctly, but after the notice period expires and the estate devolves, claimants or creditors surface. In that case, the courts have held that the executor will have no personal liability. 
Some states now allow the publication of notices online. This is because more people search for the debtor’s name online and are less likely to read print newspapers. Moreover, online publishing costs less. Hence, many courts have observed that online publishing is sufficient to protect the executor from liability.

Administration

Here’s how you can become a deemed resident of Canada:
These can include:

Closing

The final steps can include:
Other steps can include:

Probate Fees

Probate fee, also known as estate administration tax, is calculated in proportion to the size of the estate. For having an idea, following is a table of probate fees in Alberta:
(Alberta has the minimum probate fees in Canada with maximum capped at $525)

Value of Estate                       Probate Fee 

Under $10,000                            $35 

$10,000 to $25,000                   $135 

$25,000 to $125,000                 $275 

$125,000 to $250,000               $400 

$250,000+                                       $525 

How Long Will the Probate Process Take? 

Usually, it takes a few months. However, timely fulfillment of all requirements, correct filing of taxes, and fulfillment of all legal responsibilities can expedite the process. 

Ordinarily, the duration of the process depends on the following factors:
Nonetheless, if legal disputes between beneficiaries related to the will or initiated by creditors arise, the process can then take years. Nevertheless, proper estate planning before death ensures that the probate process runs smoothly. 

Probate will not be necessary for certain circumstances.

  • Firstly, an exemption exists when the property is held in joint tenancy, and the right of survivorship is present in the tenancy document. In this case, after one partner has died, property transfers to the other partner without the need to apply for a probate.   
  • Secondly, if the property consists only of cash and personal logins, one may not have to seek Probate to administer it. 
  • Thirdly, if the amount left behind by the deceased is small, i.e., below $150000, the executor can distribute it in line with the will without applying for Probate. Notably, the authority to administer a state originates mainly from the document of will itself, on which the court grants probate certificate.  
  • Fourthly, an exception is for property held by the deceased for more than 30 years: The First Dealing exemption. It applies only to the first transfer. The original Will needs to be surrendered. Hence, it applies only to a single property will and no probate on this will should have taken place.  
  • Sixthly, ‘Things’ with a named beneficiary are passed on directly to the beneficiary, and no probate is required. For example, insurance policy.  
Hence, Probate is a secondary element and is not always a necessity. The grant of Probate is only for structural and procedural efficiency.  But in most states, it is the norm.

Bottomline

Probate can be easy but can also be tricky. So, it is advisable to seek help from a professional lawyer at any stage where you feel necessary. However, equipping yourself with know-how of the process is expedient, before filing probate application. Finally, preparation for probate stage should begin well before time with effective estate planning on the part of the testator. Giving due diligence to estate planning saves time, money, and effort for the deceased’s loved ones.

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