Wills must be examined by the court and ruled valid prior to the settlement of an estate. Known as “probate”, this process is required in order to issue a Certificate of Estate Trustee to the executor, giving him or her legal authorization to handle the deceased’s estate. To probate a Will, an application must be submitted to the Superior Court of Justice (if the deceased’s residence was in Ontario)—fees associated with obtaining probate will be assessed through the court registry. Fees vary by province; however, in Ontario they can be as high 1.5 per cent on all assets. Although it may seem like a small percentage, an estate valued at $20 million would pay nearly $300,000 in probate fees.
How can we avoid paying these fees? Nearly all assets are subject to probate fees, so avoiding them entirely would be difficult and quite possibly illegal. There are, however, strategies to minimize fees. Jointly owned property, would not be included in the estate and would be passed to the other owner(s) by right of survivorship. Segregated funds and life insurance policies are not subject to probate fees as proceeds go directly to designated beneficiaries. Unlike other assets, they are often distributed before an estate is settled.