October 5, 2020
“I do not want to pay probate fees!”
I have heard this statement so many times from clients. Someone, somewhere, is feeding information to the general public about the evils of probate fees.
Can probate fees be considerable in certain circumstances?
Yes… depending on the asset base… and depending on the province where probate is obtained.
For the next month of blog posts, I thought it might be helpful to tackle the intersection of taxation and estate planning – beginning with probate fees.
Probate fees are technically a form of taxation – however, these fees do not fall under the Income Tax Act or the Excise Tax Act but are determined and collected by the various provinces. As such, probate fees vary depending on the province.
Perhaps it is helpful to first take a step back and discuss the million-dollar question, “What is probate?” I like to describe probate as the “gold seal of approval” of a Court confirming that a particular person can act as executor or administrator, and that the assets and debts of the deceased have been properly identified.
Although the power of an executor derives from the Will itself, the grant of probate is of assistance because in most provinces it starts the limitation clock for challenges to an estate. Most of the statutes governing limitation periods indicate that they start from “the date of the grant of probate”. If no probate is obtained, arguably the limitation clock never starts ticking.
It may not always be necessary to obtain probate (depending on the province). In Saskatchewan, probate is not required unless:
- We are trying to transfer real property that was not owned jointly with a right of survivorship; or
- The bank requires it prior to transferring accounts or investments (which they have legal authority to request under the federal Bank Act).
In addition, it is suggested that probate be obtained if there may be a challenge to the estate (in order to start the limitation period noted above).
Here is a snapshot of the “probate fee situation” across the country (as of the time of writing this blog post in October 2020):
|British Columbia||If value of estate is under $25,000, no fee. If value of estate is over $25,000 (but less than $50,000), then $6 for every $1000 (or part of $1000). $14 for every $1000 (or part of $1000) by which the value of the estate exceeds $50,000.|
|Alberta||Where the net value of property in Alberta subject to probate is $10,000 or less – $35 Over $10,000 up to $25,000 – $135 Over $25,000 up to $125,000 – $275 Over $125,000 up to $250,000 – $400 Over $250,000 – $525|
|Saskatchewan||$7 for every $1,000 of estate assets|
|Manitoba||$70.00 on the first $10,000 value of the estate and then: $7.00 per $1000 or portion of a $1000 thereafter|
|Ontario||$5 for every $1,000 of assets up to $50,000, and. $15 on every $1,000 of assets over $50,000.|
|Quebec||Quebec does not levy probate fees. However, non-notarized wills must be authenticated by the Superior Court of Quebec. Nominal fees apply.|
|New Brunswick||$25 per $5,000 for the first $20,000 plus $5 per additional $1,000 of gross value.|
|Nova Scotia||Estates not exceeding $10,000 – $85.60 Estates between $10,000 and $25,000 – $215.20 Estates between $25,000 and $50,000 – $358.15 Estates between $50,000 and $100,000 – $1,002.65 Estates exceeding $100,000 – $1,002.65 + $16.95 for every $1000, or portion of $1000 thereof in excess of $100,000|
|Prince Edward Island||$50 for estates under $10,000 $100 for estates between $10,001 and $25,000 $200 for estates between $25,001 and $50,000 $400 for estates between $50,001 and $100,000 $400 + $4 per $1000 over $100,000|
|Newfoundland||$60 for estates under $1000 $60 + $0.50 per $1000 of value over $1,001|
|Yukon||$140 for estates valued over $25,000|
|Northwest Territories||$10,000 or less – $30 $10,000 – $25,000 – $110 $25,000 – $125,000 – $215 $125,000 – $250,000 – $325 Over $250,000 – $435|
|Nunavut||Under $10,000 – $25 $10,000 – $25,000 – $100 $25,000 – $125,000 – $200 $125,000 – $250,000 – $300 More than $250,000 – $400|
As you can see, probate fees are not always that substantial. For example, in Alberta, fees will never be more than $525, regardless of the size of your asset base. In Saskatchewan, if your asset base is $1,000,000, the maximum you would pay in probate fees would be $7,000.
Therefore, prior to jumping into planning to avoid paying probate fees, it is important to consider the cost-benefit of such planning. In next week’s blog post we will explore one of the common questions I get asked by clients – should I add my children to registered title to my property to avoid probate and probate fees?