Probate

Probate is a familiar term for many, but remains misunderstood, and mysterious.  While probate is a very broad and complicated area of law, here is a simple guide that should allow readers to better understand the word, and the process that it represents:

What does it mean?  It is a Latin term. Probate means “to prove”.  In broader terms, it means to validate, verify, or authenticate a thing.  Although it can be used in general parlance, it is generally reserved for the field of wills, and estates.

Why does one need probate?  Subject to the comments below, assets are immediately frozen upon death.  Third parties will not release the frozen assets to the estate without probate.

Is probate required even if there was no will?  If the deceased owned assets that third parties hold, the “probate” process is generally required with or without a will. When there is no will, one is seeking authority to act on behalf of the estate.

How does one probate a will?  Once ready, the documents are filed with the Court.  It rarely requires applicants to give evidence viva voce.  It is generally completed by paper work. The Court reviews the application and issues a grant of probate, telling the world that the will is valid and can be relied upon as such.  The grant is still called a Grant of Probate, although new laws and procedures refer to it as a Representation Grant, and an Estate Grant – see Divisions 3 and 4 of WESA (Wills, Estates and Succession Act) for statutory provisions for probate in B.C.  One is asking for an official declaration that the will is legal, and can be relied upon as legitimate.  One must complete required forms and procedures before applying for probate.

How long does it take?  After accounting for the time it takes to make the application itself, the process takes about 4-6 months.  This is an average, as each case is different, and different court registries vary.

What is the difference between probate and estate administration?   After probate, the Executor can then take control of the estate assets, and administer the estate.  This second phase is termed “estate administration”.  Here, the Executor has access to the assets, pays bills and taxes, and in the end distributes assets to entitled beneficiaries.  Administration often takes months, or even years to complete.  Probate is a court process.  It is essentially phase one.  Once probate has issued, it unfreezes the assets.

Can I plan my affairs to avoid probate?  Yes, in some cases.  This is a very broad area of discussion, and one is encouraged to consult with an estate planner, accountant, and wills lawyer before considering this approach.

Can I do it myself?  Yes.  While many seek the assistance of probate lawyers, this is not mandatory.

How much does it cost?  We can break this down into two cost items: lawyer fees, and the provincial probate filing fee.

(a) If lawyers are retained, lawyer fees will be in play.  Lawyer fees vary depending on many factors including the complexity of the matter, the amount involved, and the results achieved.  One would secure an estimate of lawyer fees before proceeding.

(b) Probate filing fees are a user fee levied by the province, if probate is required.  You can review the fee schedule under section 2 of the Probate Fee Act.  In general terms, it is levied at 1.4% of all assets reported in the probate application above $50,000.  As a guide, one million dollars fetches a fee of approximately $14,000.

Does the probate filing fee apply to all of the deceased’s assets?  Not necessarily.  The fee applies to the gross value of all assets reported in the application to court.  If some of the deceased’s assets pass directly to an individual, probate filing fees may not apply to those assets.  This might include assets held in benefit plans, assets in inter vivos trusts, and joint assets, by way of example.

Who pays for the cost of probate?  The estate bears the burden of the cost associated with probate.

Is probate always required?   No.  Probate is generally a requirement of third parties – banks, financial institutions, the government, and so on.  If these third parties do not require probate, then probate can be skipped.  However, probate will be encouraged in some cases, even when third parties do not require it.  There are, in some cases,  strategic reasons to secure probate, and some deadlines imposed by law that are determined by the date upon which probate is issued by the court.  In those circumstances, probate may be wise even if not requested by third parties.

Is there a monetary threshold below which no grant in needed?   No.  A grant will be required if a third party insists on it.  However, no government probate fees are payable if the estate is under $25,000.