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.
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.
Lynne;
ReplyDeleteIs 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
This comment has been removed by the author.
DeleteOf 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.
DeleteLynne
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?
ReplyDeleteNo, it's not just lawyers who can do probate, though probate lawyers can get the job done more quickly and easily than most people simply because they have experience.
DeleteThe lawyer you choose doesn't necessarily have to be in the same town. The same province, yes, because the probate process and forms are very different from one province to the next. when choosing a lawyer, you should realize that probate documents do have to be filed at the court nearest where the deceased lived. However, these days with e-filing, couriers, etc the proximity is less important than it used to be. Things could be a bit slower if the lawyer is further away but not substantially so.
Any individual can do an application for probate on his or her own as long as they are able to deal with the paperwork. There is a fair amount of paperwork on an estate, and most people have never been an executor before, so it could be challenging. If the estate is not too complex, it may well be within the capabilities of the average lay person.
There are books and kits available in some provinces to help people apply for probate without a lawyer.
In Canada, most paralegals work within law firms, along with lawyers. In fact, if you hire a large firm to do your probate, you can be sure that a paralegal has been involved with it, though the lawyer bears ultimate responsibility for the paperwork being right.
In some places there are paralegals outside of law firms. I personally would be extremely careful about hiring anyone who purports to give legal advice but is not a lawyer. If you are looking into paralegals, do plenty of due diligence by calling the BBB, checking with any organization who regulates them, etc.
Lynne
You can fill out the papers and file them yourself if you want...just as you can replace the brake pads on your car...but would you feel comfortable if you did ? In my case it took me more time just to read the documents than it did to have a lawyer fill them out, file them and get the grant.
DeleteI like your analogy, Paddy. I don't take out my own appendix or build my own computer. I leave that to those with some expertise.
DeleteLynne
Have a question...hopefully I didn't already ask it. I've done the math and adding the CPP death benefit to my own taxes would be the same as completing a T3. Can I add the CPP death benefit to my own taxes and take that money out of the estate account as an estate expense ? It would likely save the estate the cost of preparing the T3.
ReplyDeleteDoes a will that leaves $20,000 to a minor beneficiary, in trust, need to be probated even if the estate is only worth $3400?
ReplyDeleteI realize this question seemingly makes no sense so I'll give a quick explanation.
The executor of said will is also the common law spouse of the testator, who claims that all bank accounts, investments and policies were jointly held or designated to herself with the exception of one older vehicle valued at $3400. I know the deceased had a fairly large estate of which there are 4 beneficiaries. His CL wife was to receive his chequing accounts and all household items, his grandson-$20,000 and his two adult children were to receive the residue.
I feel that the deceased intentions were obviously stated by the will, but he perhaps left his accounts all joint with his spouse to avoid probate...trusting her to follow his wishes on her own...who the heck leaves $20,000 from an estate to someone and then insures that there is nothing in the estate to pay it? lol It's ridiculous...