What is subject to Probate?

Do you want to leave your entire estate to your spouse or common-law partner? In such cases, it’s smart to insert a common disaster clause in your will. Without it, here’s what could happen: If you or your spouse died, your assets would go through probate twice. Once for your will and once for your spouse’s will.

To avoid that, wills with a common disaster clause usually specify that if you and your spouse die within a short time of each other (such as within 30 days), your estate would instead go to contingent beneficiaries – like your children – rather than to your spouse.

Without probate, your executor can hit a wall.

Imagine if your executor contacts your bank, mutual fund company, or pension plan provider, or the land title office with a non-probated will in hand. Your executor then asks them to hand over your money or register a transfer of property title.

Those institutions will want proof that:

• you’ve died,
• the will is valid and is the final version,
• your executor is the person named in your will, and
• they won’t be sued if anyone contests the will.

Consider this: Why would a bank risk a lawsuit for handing out your money to the wrong person? They’re not likely to take a risk by assuming your non-probated will is valid. Instead, the bank may refuse to release your money until it gets the legal protection. And, they can only get this legal protection from approval of your will by the provincial probate court. That’s the big upside to probate.

Each province has its own rules. But generally speaking, your executor must apply to your province’s probate court for approval of your will if you:

• died in debt
• had bank accounts, registered investments  or life insurance policies without a named beneficiary and if the financial institution is not prepared to pay out the funds without probate; or
• if you owned real property that isn’t being directly passed to your spouse or common-law partner through joint ownership.

(*Please note: If the estate is essentially bankrupt, then the executor usually doesn’t apply for probate. Why? Because there’s no money to cover the cost.)

Let’s assume we’re talking about your own will.

• You don’t have to do anything, because probate is a process that affects your will after your death.
• Your executor. Remember, this is the person responsible for carrying out the terms of your will, making sure your debts are paid, etc. After your death, your executor must secure the assets of your estate. They’ll then determine whether your estate needs to go through probate. Even if it’s not a legal requirement, your executor may apply for probate to ensure that they can rely on your will as being the final version of your written instructions.

Then the courts have to appoint an administrator – and the costs will be similar to probate.

But it really helps if you have a will.

An executor is someone who can carry out the terms of your will and look after your assets after your death. If you’re writing a will, you’ll have to name an executor. It could be a family member, a lawyer or someone you trust. If you die without a will, the court may appoint an administrator for your estate.

Please note that “assets” refer to anything you own that has financial value. This could be a home, a car, a savings account or an investment. These assets are what make up your estate.

Most assets including property, vehicles, stocks, bonds, bank accounts, share ownership. Exceptions include certain assets to a named beneficiary such as RRSPs, RRIFs, TFSAs and insurance. Also excluded are assets given or created during the decedent’s life, such as gifts, and assets in “Inter Vivos Trusts”

A judicial process to transfer a decedent’s estate to its beneficiaries, validate the will, and empower the executor to administer the estate.