What is Probate all about anyway?
For the average person, one of the most common mysteries in the legal world that touches just about everyone is the concept of “probate”. Most people know that it has something to do with a person passing away, and that it somehow relates to their will. But………What is it? When is it needed? Why is it needed? Who has to get it? And isn’t it expensive to get? We will try to answer these mysteries (and maybe a few more) in a basic “Probate 101” format.
What is Probate?
A “Grant of Probate” is a court order that is granted from the Supreme Court of British Columbia. It is commonly referred to as a Probate Order and it’s typically granted to the executor named in the deceased person’s will. The Probate Order gives the executor the legal authority to administer the deceased’s estate. Which brings us to the next question……
What is the Deceased’s Estate?
The deceased’s estate consists of the value of the assets that the deceased owns on the date of death, minus the value of any of the deceased’s liabilities that are specifically connected to one of the estate assets (e.g. a mortgage on the deceased’s home). However, some of the deceased’s assets are not included within this definition of the “estate”. For instance, any asset that the deceased owned jointly with anyone else at the time of death is not included as an estate asset. The most common examples of these might be a home that is jointly owned with his/her spouse; or perhaps a bank account that is jointly owned with his/her adult child. Another exception is any asset that has a named Beneficiary attached to it (assuming that beneficiary is still alive at the time of the deceased’s death). Examples of these kinds of assets that are not estate assets are life insurance policies, RRSP/RRIFs and Tax-Free Savings Accounts. There are instances of a deceased not having any estate when they pass away if everything, they own is jointly owned with someone else, or the asset has a living named beneficiary attached to it.
When is Probate Required?
A Probate Order is going to be required in British Columbia any time the deceased owns a piece of real estate or has any other interest in land (e.g. he /she holds a mortgage on someone else’s property). Also, even if the deceased doesn’t own any real estate or other interest in land, a Probate Order is also typically going to be required if the deceased has other estate assets that exceed a total value of $25,000.
Why is a Probate Order Required?
A Probate Order gives the holders of the deceased’s assets (e.g. a financial institution or investment house), or the registries that those assets are registered in (e.g. the Land Title Registry or the Motor Vehicle Registry), confidence and assurance that they’re dealing with the correct person. The Probate Order is essentially a statement from the Supreme Court of BC that the person who claims to the executor is in fact the executor; that the will being presented is valid; that the will was the deceased’s final will; and that the third-party financial institution or registry can deal with the executor without worry that they’re dealing with the wrong person. Most financial institutions and registries will not release the estate assets to the executor unless the executor first provides them with a Probate Order from the Court. The executor needs this because if the executor can’t get the deceased’s assets released to him/her, then the executor can’t distribute the deceased’s assets to the heirs named in the will.
Who obtains the Probate Order?
In most cases, the executor named in the deceased’s will is the person named as the applicant when the application for probate is filed with the Court. However, the court registry’s statistics show that the large majority of the applications received are actually filed by a lawyer who has been retained by the executor to make the application on his/her behalf.
What are Probate Fees?
Probate fees are the Court’s fee for processing the probate application and issuing the Probate Order to the executor. The Court’s probate fees are approximately equal to 1.4% of the value of the estate assets.
The information above is intended to provide a very high-level and general overview of some of the common questions that we often receive when a loved one passes away. However, each estate is different and unique in its own way, and we suggest you contact your lawyer if you have any further questions on this topic.
© Linley Welwood LLP
The contents of this article do not constitute legal advice. Readers should seek legal advice in relation to their own specific circumstances.