A concerned grandmother called recently wanting estate planning strategies to avoid probate. She was quite concerned, having heard that one-third of her estate would go to lawyers and one-third to probate fees, leaving only one-third for her family.

I reassured her first about probate fees.

My column published February 4^th, 2024, gives the formula for calculating probate fees along with a couple of example calculations.

Nowhere near one-third! Probate fees are only approximately 1.4%.

For a $1 million estate, probate fees calculate out to be $13,450.00.

I then reassured her about legal fees.

Lawyers are indeed expensive! If there is a fight over the will, legal expense can eat up even more than one-third of an estate.

But a run-of-the-mill estate with no fights shouldn91裸聊视频檛 take more than about $5,000.00 in legal fees to achieve the estate grant as long as you don91裸聊视频檛 saddle the law firm with a bunch of executor work you could be doing yourself.

Call around. You might find some firms willing to do the work for less than that.

The executor you appoint might charge fees, typically in the range of 2-3%, but you91裸聊视频檝e likely appointed a family member.

There are estate planning strategies that can eliminate the need for probate altogether, but those strategies come with their own expenses and can have downsides.

One common strategy that I91裸聊视频檝e written about a few times is joint ownership. Have a look at my columns published February 4^th, 11^th, 18^th, September 1^st, and October 27^th, for various discussions about that strategy and problems that can arise from it.

Another, though quite expensive strategy, is a trust.

After a thorough consideration of all factors, I typically advise clients against employing probate avoidance strategies unless my clients are spouses with no step-children.

You might wonder how the government assesses the value of your estate for the purpose of collecting the applicable fees.

Your executor, as part of the probate process, will have to make a list of your estate assets along with their values.

Secured debts, i.e. those that are secured against estate assets like a mortgage, are also listed. That list is attached to an affidavit your executor will swear is accurate.

Probate fees are assessed based on that affidavit, calculated on the total value of the assets minus the secured debts.

Only estate assets must be listed. There is no need to list assets that pass outside the estate.

I know. That91裸聊视频檚 a confusing concept.

Here are some assets that would pass outside the estate provided you named a beneficiary that91裸聊视频檚 not your estate:

1. The proceeds of a life insurance policy,
2. The contents of a Tax-Free Savings Account (TFSA),
3. The contents of a registered retirement savings plan (RRSP) or Registered Retirement Income Fund (RRIF),
4. The proceeds of a Registered Pension Plan (RPP),
5. The proceeds of an investment product sold by life insurance companies that I91裸聊视频檓 just now learning about called a segregated fund.

Each of these financial instruments allow you to name a beneficiary. If you name your estate as beneficiary, the proceeds become part of your estate and are subject to probate fees.

Another category of assets that pass outside the estate and need not be listed is assets that are owned jointly with someone else in a true joint tenancy.

I say 91裸聊视频渢rue joint tenancy91裸聊视频� because there are different types of joint tenancy arrangements - a topic for another column!

With a true joint tenancy, the surviving joint owner becomes the full owner on your death and the asset thereby passes outside your estate.

Everything else must be listed.

For the most part, though, the list doesn91裸聊视频檛 have to be item by item. There91裸聊视频檚 no need to list each piece of cutlery, item of linen, article of clothing and piece of furniture.

But for some items it91裸聊视频檚 important to be very specific.

Next week I91裸聊视频檒l give some direction about how to properly list estate assets when applying for an estate grant.

Paul Hergott

Lawyer Paul Hergott began writing as a columnist in January 2007. Achieving Justice, based on Paul91裸聊视频檚 personal injury practice at the time, focused on injury claims and road safety. It was published weekly for 13 陆 years until July 2020, when his busy legal practice no longer left time for writing.

Paul was able to pick up writing again in January 2024, After transitioning his practice to estate administration and management.

Paul91裸聊视频檚 intention is to write primarily about end of life and estate related matters, but he is very easily distracted by other topics.

You are encouraged to contact Paul directly at paul@hlaw.ca with legal questions and issues you would like him to write about.

paul@hlaw.ca