Canadians spend millions of dollars every year on probate. While the process can be helpful for authenticating a will and settling a deceased person’s estate, many Canadians try to avoid probate due to the fees, lack of privacy (when probate records are made public), and the extended settlement times that it often leads to.
If you’re looking for ways to legitimately avoid probate as a Canadian, here are some estate planning strategies and tips suggested by experienced lawyers practicing will probate in Alberta:
Make a will.
If you’re one of the many millions of Canadians who haven’t made a will, your estate would have to go through probate in the event of your death.
While having a will does not necessarily eliminate the need for probate, it can simplify the estate administration process for your designated executor and help ensure that your wishes are clearly documented.
Making a will is particularly important for anyone in a common-law relationship in order to ensure that loved ones receive the intended inheritance and aren’t ignored by inheritance laws.
Joint ownership with the right of survivorship
This is a simple strategy for avoiding probate. If you own assets jointly with another person, those assets transfer automatically to the surviving owner upon your death.
Although it isn’t considered an estate transfer when probate isn’t present, passing assets through the surviving owner can reduce the likelihood of probate fees and keep your estate’s value lower.
Naming a beneficiary on registered accounts and insurance policies
Designating beneficiaries on certain accounts and policies is a simple way to prevent them from being included in probate, as they pass directly to the named beneficiary. If you don’t do this, the assets will be dissolved into your residual estate and may increase the amount subject to probate fees, if probate is required.
Create a revocable living trust.
By creating a living trust when you’re still alive, you get to continue managing the assets within it for as long as you are able to. Then, when you die, the assets in the trust will be distributed to the beneficiaries of the trust according to the way in which you have set it up. Because the trust is entirely separate from your estate, this happens outside of the probate process.
Gifting assets while you’re still alive
Giving assets such as vehicles, cash, and property to people of your choice during your lifetime can help to reduce your estate’s size and avoid it having to go through a grant of probate when the time comes.
It’s worth noting that in Canada, every province has different requirements for the legality of a will, so you must check with a wills and estates lawyer to ensure that your will is valid. It’s also worth remembering that probate may be unavoidable in some circumstances, such as if the will has been disputed, an institution requires a grant of probate, or for high-value estates.
Understanding these strategies can help you reduce the likelihood of probate and better protect your estate for the people who matter most.
