Probate: Understanding What Probate is-Steps in the Probate Process

What is probate?

Probate is the legal process of distributing your assets according to your wishes, which includes determining the validity of your will, gathering your assets, paying your debts and taxes and then distributing the remaining assets according to your last will. To get the process started Your Personal Representative, the Executor, will submit your will to probate court to have it validated. The main advantage of probate is that the probate court is supervising the entire proceedings, and the probate laws are being followed.

What Steps are involved in the Probate Process?

Probate process can be a complicated, lengthy and confusing process, but here is the general process; the probate process involves two steps:

  • Pays debts you owe, including taxes
  • Transfers assets to your beneficiaries, as per your will

The probate court oversees the probate process to make sure everything goes according to the probate laws and your will. Because probate courts are not federal courts, the processes they follow will vary. Despite their differences, these courts all pretty much follow the same basic processes:

  • Swearing in your Executor
  • Notifying heirs, creditors, and the public that you are, indeed, dead
  • Inventorying your property
  • Distributing your estate

Steps In Probate Process

Cost of Probate

There can be substantial cost involved in probating an estate, so it makes sense to avoid or limit full probate where possible legally [we will discuss legal means to do this in the next article]. Although probate costs will vary from province to province and state to state, they average range is between 0.5% and 2% of your estate. But that is not all, there are more costs associated with distributing your assets, some other costs are executor and attorney fees, executor fees can range up to 4%. Then there are always taxes your estate will have to pay before transferring assets.

How Long Does Probate Take?

The length of probate will depend on the complexity and seize of your estate, the larger and complicated your estate is the longer it will take to settle. It also will also depend on if you have a valid legal will and whether it will be contested by others or not. On average probate process can takes between 1-2 years if there are no complications, however in some cases it goes on for decades. To speed up the process and avoid complications it is highly recommended to have an updated and valid will.

If you need more information regarding probate and estate planning, please consult a qualified estate lawyer and/estate planner.

In the next article we will discuss ways to reduce your probate costs and leave more for your beneficiaries (legally).

25 Responses to Probate: Understanding What Probate is-Steps in the Probate Process

  1. So are ALL of your debts paid out of your estate prior to the distribution of your money? What happens if the value of your estate is less than what you owe to creditors? This may not be the place to ask those questions but I have often wondered where your debt goes when you die.

    • My mother is a Canadian resident and owns a condo in BC. She is in the end stages of life and we don’t expect her to live much longer. She has a condo that we (four children) are ready to put on the market, but wonder if it would be better to wait to sell after her death and have it go through probate? Of does the gain still go through probate? I am worried about more taxes if through the probate system. Is there any place to go to learn probate laws in Canada, without having to become a lawyer? thanks.

      • Kathy, becoming a lawyer wouldn’t help. My lawyer has added my mother’s tax-free account on to probate. So I’m trying to teach him the the law. My mother also has a condo in BC – I’m Canadian, however a non-resident, so the issues, as far as I’ve learned, are as such for non-residents: 25% of the gross sale of the condo will be withheld for taxes. That’s the bad news. The good news is that if you fill out a T…. form PRIOR to the sale of the home, then you’ll only get hit with 25% of the capital gains. You shouldn’t get hit with capital gains as long as it’s still in your mom’s name or as the “estate of……”. Once it gets transferred to your name after probate, then I believe the capital gains will begin as per the market price at her death. To get around probate, you could get your names on the title if you are residents or non-residents of Canada – however, if you are a non-resident then capital gains will apply, maybe from the time of purchase (?). And if you are residents and have your own primary residences in Canada this may, yet again, open up a whole new can of worms re capital gains on the house. While it is in your mom’s name, and if it is her primary residence, there won’t be capital gains. If you have power of attorney, I would sell the condo now while it is still in your Mom’s name so that everything is clear and simple – this is just an opinion. Plus selling while something is going through probate has to be written up “subject to” probate. Hope this helps.

  2. @ Kyle thats a good question! Jason pretty much answered it. Debts need to be paid off before asset can be transferred. Creditors file a claim on your assets and the court will oversee that they are paid. There are some assets that skip the probate process and creditors do not have a claim on such as Segregated funds and insurance policies since they have a named beneficiary. These will not be included in your estate and creditor’s can not file a claim on (even in bankruptcy)

  3. All debts go to heaven…ooops sorry that’s dogs. As far as debts, I believe if it is unsecured – i.e credit cards, school loans they disappear. Secured debt (i.e. mortgages, car loans) go with the asset to the person receiving that asset. But hey, I’m not a lawyer! =)

  4. @ Jason, no life insurance proceeds (as well as Critical Illness insurance proceeds) are tax free and bypass the estate. Often life insurance is used to reduce the tax burden on family members when transferring assets.

  5. Ray, just to clarify your last sentence…I believe that life insurance proceeds ARE included in your estate for tax purposes if you are the owner of the policy, but they skip the probate process if there is a named benny. A sizeable life policy can create an estate tax burden that some often overlook.

  6. Ray, that’s correct they are income tax free. I should clarify – I was referring to the Federal Estate Tax Exemption. The way I understand it is that the proceeds are included in your estate, which means that it will make your estate larger and could potentially push you over the $3.5m exemption for Federal Estate tax purposes (if you have a large policy and you are the owner).

  7. If you have a will than your will most likely will have to be probated. unless all your assets are owned jointly your spouse may not always have access to them without a probated will.

  8. Jason,

    Ray is writing about the Canadian estate system which is much different than the US system. Canada does not have an estate tax, but rather when you die, you are deemed to have sold your worldwide assets at fair market value. You the pay capital gains (generally) on the net gain.

    We also do not have a gift tax or gifting limits in Canada.

    I know you are referring to the US estate tax, and if I remember correctly, life insurance proceeds in the US are included in the valuation of the estate for US estate purposes and, yes pushes the estate above the exemption.

    I know it’s been over a year since this article was written but anyone reading the comments should be aware of this difference.

  9. If a spouse dies however their will states that the estate goes to the remaining spouse but the remaining spouse died weeks earlier what happens? IE: they were sick and did not have a chance to change the will. Is the executor of the will of the last spouse still valid? Is the will still valid and how can it be if the reciepient is deceased? Will the estate have to go thru probabe now to be distributed amoungst the remaining living relatives IE: biological children of the deceased? thank you.

  10. @Marcia….this sounds like a complicated case and I am not a lawyer or estate planner. I would highly recommend you seek legal advice from a qualified lawyer.

  11. Does my fathers estate need to go to probate if he had no debts or mortgage and his will left everything to my mother? Please advise

  12. @Nancy,

    It all depends on the size of the estate, type of assets etc. I a property was held in joint tenancy probate is not needed for it. For life insurance, RRSP/RRIF if there are named beneficiaries probate is not needed. It also depends on the size of the estate, often for smaller estates the financial institution will not need a probated will.

  13. I have a really close friend that needs help. This is the situation, in 2004 his parents remortgaged their home, (after it was paid off), and gave the $$, sum of $75000.00 to one of five (5) children, to build a garage on their own property. There was a signed and dated promissory note between the parents and child, stating the she will pay the mortgage payments, and in case of death of the parents that amount will be paid off. Since 2004, there has been missed payments and NSP cheques from the child for repaying of mortgage, and the parents covered this. Doing this, put them in financial distress with everyday living, eg. food, medication, gas for the car and utilities. My friend tried to help when he can will extra $$, and food. Now in 2011, both parents have passed and there is still a $48000.00 mortgage on the property and the child is refusing to make anymore payments to the mortgage. This is putting a lot of stress on the rest of the siblings, because there was no will done. My friend lives in Ontario, Canada; and he doesn’t have the $$ to pay the lawyers, let alone the funeral cost. What can he do to make her responsible for this $$?

  14. Query: Deceased has a bank account in Edmonton, died in Vancouver and Executor is in Calgary. Who can file for Probate and in which city does the probate have to be filed?? Getting conflicting answers.

  15. Where do I get the probate forms to begin the process?
    There is a house involved (we are in B.C. Canada) that is left to three adult children, but it was not jointly in their names, so it will be subject to the fees?? $14 per thousand?? (that’s a lot!!) plus probate fees?

  16. My stepfather who was a wealthy man has recently passed. He left a nephew as exectuor of the will because he made some last minute changes in his final days. The lawyer will not speak to me regarding the will but said I must contact the executor who seems to be avoiding me. How do I find out what and who are named on the will, and if I feel I need to contest, do I hire a lawyer of my own.

  17. My stepfather has been named executor of my mothers will….he is thinking of leaving the country to back to Europe to live, does this automatically give up his right to be executor and it goes to my sister who was named as second executor? Is investments my mother made ie: GIC concidered part of her bank accounts?

  18. Wills and probate are complicated to say the least no matter what the size of the estate. Joint ownership does not really mean everything passes on to the other person. For instance I had a joint account with my mother. Upon her death I was told by the bank the money was mine as I held the acount jointly with my mom. My sister is contesting my mothers will and now that account is classed as part of the estate. Even probated wills can be turned around because of greed. A will is not worth the paper it is wrote on when anyone can contest it for any reason they choose. So now the account is almost empty the bills still need to be paid. Courts allowowing wills to be contested because someones nose is out of joint is costly to the entire family. Five siblings in agreement and one not should account for something but no the one not in agreement is the one who spends what was left to everyone else.By the time all court proceedings are done the estate will end up in the hole. Yhe only ones who benefit from it are the government, courts and lawyers!!!

  19. My mother has no physical assests, no insurance, bonds, etc.
    She does have a sum of money in GIC’s and savings. Does probate tax still apply?

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