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Sunday, June 13, 2010

The mythical "will that doesn't need probate"


Earlier this week I spoke with a customer who told me that some years ago he had asked for, and paid his lawyer for, a "Will that doesn't need probate". He seemed annoyed when I told him that based on the assets he currently owned, his Will would have to be probated if he should pass away.

There is no such thing as a "Will that doesn't need probating" because the Will itself is not the only determinant of whether probate is necessary. Whether or not you need to probate someone's Will often depends on what kind of assets they own, and how those assets are held (e.g. jointly owned, owned solely but with a designated beneficiary, etc.). If you own certain assets, your Will must be probated, or if you don't have a Will, someone must be appointed as an administrator.

The customer I was dealing with owned a mineral title. On talking with me in more detail, he remembered that the lawyer had said if he didn't want his Will to be probated, he had to change or get rid of his mineral title. The customer hadn't done that.

An estate plan is a jigsaw puzzle, and the pieces are the Will, the assets, the family, the beneficiary designations, the jointly owned property, the incapacity documents (Power of Attorney and health-care directive) and the taxes. All of the pieces have to work together.

When you ask an estate-planning lawyer for a "Will that doesn't need probate", what you are really asking is for a plan in which all of your assets are dealt with during your lifetime. This is achievable, as long as you're willing to own absolutely everything from your car to your business to your bank account in joint names with other people, or to name beneficiaries (where that is possible) other than your estate. This is generally only practical for married people and even then, not always. People do get divorced, after all.

You have to ask yourself why you'd live your life that way just to avoid probate. Particularly in those provinces where the probate fees are low, probate isn't expensive so it simply makes no sense to put your assets at risk this way. You may think that avoiding probate is simpler, but if you have to change the ownership of everything you own, and possibly lose some of those assets to other people, is that really easier?

So if you're thinking of asking your lawyer for a "Will that doesn't need probate", get the facts about probate first. Don't rely on anecdotes told by co-workers or friends about what they think happens on estates. If you're reading advice in magazines or blogs, check with a lawyer in your area to see whether it applies to you. Think about whether avoiding probate is actually worthwhile - and workable - for you.

4 comments:

  1. Lynne;

    Is this article telling the truth? If your parent sells his or her house because of a protracted illness and puts all of his money from GICs, house, chequing, etc. into joint accounts, why is there a need for probate?
    If all concerned trust each other, the process is seamless, right? Then why not tell your readers the truth and stop calling it a myth?
    WGW

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    1. This comment has been removed by the author.

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    2. Of course it's the truth. If you read it a little more carefully, you will see that I did not say that all wills need to be probated. What I said was that you cannot guarantee in advance that a will won't need probate. And lighten up on the accusations of lying, ok? The fact that someone says something you don't like or agree with doesn't mean they aren't telling the truth. And let's face it, I know a lot more about this than you do.

      Lynne

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  2. We live in Ontario, and we are wondering--is it only lawyers who can probate a will? Can a paralegal do it? Or can a regular person do it? Do you have to use a lawyer specifically in that town to probate the will, or can you use an attorney in another town to handle the probate in a neighboring town?

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