Probate is not needed to transfer certain kinds of assets. Specifically, you do not need probate to transfer property that is held in joint names. This is because joint ownership carries with it a right of survivorship of the other owner(s). For example, if a husband and wife own their home jointly and the wife passes away, the husband owns the house by right of survivorship and doesn't need probate to put the title in his name alone. Take note that this rule does not necessarily apply to assets that were jointly owned by the deceased and his or her children.
You also do not need probate to transfer assets that have a named beneficiary. These assets include RRSPs, RRIFs, life insurance policies, pensions and some other assets. When the owner of the asset passes away, you only need to provide a Death Certificate and some information in order to transfer that asset to the person who is named.
Because of these rules, it's quite possible, and in fact is the norm, that a husband and wife can set up their financial affairs using joint property and beneficiary designations so that when one of them dies, the other one does not need to go through probate.
For anyone who is not in that situation, and whose assets are not all going to pass to someone automatically due to joint tenancy or beneficiary designation, the question of whether probate is needed is going to depend at least partly on the type of asset they own.
If you own real estate in your own name alone, or if you own it as a tenant-in-common, your executor will need a Grant of Probate to transfer or sell your property.
If you have assets that will form part of your estate after you die, such as life insurance policies and RRSPs that name your estate as beneficiary, your Executor will need to get probate. This also applies to any assets held in your name alone, such as a bank account, investment, or expensive personal items (e.g. art collection).
If you have a significant amount of money in your estate, your Executor will need probate before he or she can gain access to it.
There are other, less common, reasons why executors must go through probate. For example, the executor might have to finish litigating a lawsuit on behalf of the deceased. There could be a dependent who wants to make a claim against the estate. There could be some question about whether the Will itself is valid or some of its terms might need to be clarified.
It's sometimes hard to tell right at the beginning of an estate whether or not you need to go through the probate process. Sometimes the only way to know for sure is to take the Will to an experienced lawyer, together with information about the deceased person and his or her assets, and ask for an opinion.
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It would seem to me that naming a person as a beneficiary instead of an estate would be the easiest and fastest route for distribution. Is there some benefit that I can't see to naming an "estate" as a beneficiary.
ReplyDeleteI've replied to this question by creating a new blog post on Feb 29, 2012.
DeleteLynne
I am named in the will does that matter. (Dad has passed already)
ReplyDeleteThat's a pretty wide open question. Does it matter in what way? I'm trying to interpret the question in the context of my original post, which was about not all wills having to be probated. So the closest I can get is that you're asking whether a will still needs to be probated when someone is named. I still can't answer the question though because I don't know whether you mean named as executor or named as beneficiary. Could you be more specific about how you are named, and what you mean by "does it matter"?
ReplyDeleteLynne
I have been named the executor on my grandmother's will. She did not have it done up by a lawyer but had it witnessed by a Commissioner of Oaths at one of the hospitals she was at when she was ill. She did not have very much (just her main account at the bank) and left me clear instructions on how much to give each beneficiary. I will be paying out all her funeral expenses on my credit card. I will be paying out any outstanding bills and filling out all the required government forms. My first question would be, in this scenario, if it would be best to go through probate or not. My second question is about advertising for creditors (I would assume that this should be something done; although she never owed anyone except the extended care facility and her phone bill). I just want to make sure I'm doing everything right. Thank you.
ReplyDeleteHi there,
ReplyDeleteGlad to see you're being careful to do it all right; that's not so easy is it?
You don't have to pay the funeral expenses on your credit card. You can submit the invoice to the bank where your aunt has her account, and they will pay it, with or without probate.
From what you've said in your post, I don't see why you would need probate, unless the bank that holds the account insists on it. Ask them directly. There are other reasons for probating, as you no doubt read in my post, but you haven't said that any of those circumstances exist in your case.
As for advertising for creditors and claimaints, there is no requirement for an executor to do that. It's something that an executor does to limit any liability that might arise if a creditor showed up after all of the estate assets had been disbursed. Each and every executor has to weight the costs of the advertisement against the risk of such a creditor existing. From what you've said here, there shouldn't be any such creditors out there, but ultimately you have to decide how comfortable you are in foregoing the advertising.
Best of luck with the estate.
Lynne
Thank you for the information Lynne. We had joint right of survivorship (I learned this after taking a wills class; we thought we had it set up that way when we did joint, but didn't realize it had to be joint right of survivorship), so the bank said I didn't need to do anything with them. If I have made payments out of my bank account and on my credit card for items and have kept the receipts, I guess I should just double check that I can be reimbursed from the funds in the account? I was making the arrangements so quickly that I automatically paid on my own for the deposit and final payment on the funeral luncheon that my grandmother requested. I have 30 days to pay the funeral home invoice, so I can do that through the bank. I will only owe on the final payment for the nursing home, the funeral home and her final telus bill...and whatever would be owed on taxes/gst along with any pro-rated amounts I may have to pay back to the government as her room was based on daily billing and she passed on the 28th of the month.
DeleteI heard that I should not pay the beneficiaries up front (or at least not all). When I do, is it a good idea to have them sign off? I had read something about that online. If so, is there a form letter that an executor can use?
Thank you for all your help.
Dear Lynne: Thank you for your informative and helpful blog. Our grandmother recently passed and we are starting the process of dealing with the estate (including a jointly owned cottage and a solely owned Florida condo). We wonder if you could please provide a couple of references to "must-read" layperson guides to the probate process in Ontario. With regard to the Florida condo, we are trying to figure out if it would be best to undergo formal or summary administration of probate. Your insights and suggestions would be greatly appreciated.
ReplyDeleteHi. Self-Counsel Press, who publishes my books, has published a probate guide for Ontario. Here is the link (you might have to copy and paste it into your browser): http://www.self-counsel.com/default/probate-kit-for-ontario.html
DeleteLynne
how much money in an estate would make it mandatory for probate?
ReplyDelete