Don't Let Probate Cost You an Arm and a Legacy.
When someone passes away, their money and property need to be sorted out and given to the right people. Often, this involves a court process called probate. Think of it as getting the court's official permission to handle everything. While it's sometimes needed, probate can cost money and take a lot of time. Let's break down what it means and how you might be able to avoid some of the hassle and costs.
What Exactly is Probate?
Probate is basically the court double-checking that a person's Will is real and giving the person named in charge (the "executor") the legal green light to manage the deceased person's money and property (their "estate").
Why is it needed? Banks, investment firms, and the Land Title office want proof that the executor has the right authority before they hand over assets. Probate gives them that legal proof. But, not everything someone owns automatically needs to go through this court process.
How Much Does Probate Cost? (Hint… it’s your money & time)
Going through probate court costs money. The BC government charges fees based on the total value of the money and property that has to be dealt with through the Will.
Here's a rough idea of the fees (as of April 2025):
$0 for the first $25,000.
A bit (0.6%) for the value between $25,000 and $50,000.
More (1.4%) for the value over $50,000.
Plus, usually a $200 court filing fee if the total is over $25,000.
Legal fees and other expenses not easily quantifiable.
These fees are paid out of the estate – meaning there's less money left for your family or chosen beneficiaries.
Besides the cost, probate takes time. It can easily be months, sometimes even years, before your loved ones receive their inheritance.
Also, the details in the Will and a list of what the person owned become public information at the courthouse. This also leaves the potential for challenges to will, although this piece is best left to lawyers to explain!
How Can Your Savings Skip Probate?
Good news! You can plan ahead so some of your money avoids probate. Assets that go directly to someone without needing the Will often skip the court process.
Two common tools that help with this are Segregated Funds and Trusts:
Segregated Funds: You can think of these like investment funds you can still invest (such as Mutual Funds) that act like an insurance policy. The important part is you can name a beneficiary directly on the contract – just like an RRSP or life insurance. When you pass away, the money can go straight to that person, skipping your estate, the probate process, and the related fees and delays for those funds. It's a way to get money to people quickly and privately.
Trusts: A trust is like setting up a secure box to hold money or property. You choose someone trustworthy (a "trustee") to manage the box according to rules you set up, for the benefit of people you choose ("beneficiaries"). If you move assets into certain types of trusts while you are alive, those assets legally belong to the trust, not you personally. So, when you die, anything inside the trust doesn't need to go through probate court. It's handled based on the trust rules you already made, avoiding those probate costs and delays for everything in the trust.
Take Charge of Your Planning
Probate can take a bite out of the money you leave behind and slow things down for your family. But planning ahead can make a real difference. Using tools like naming beneficiaries clearly on accounts, looking into segregated funds, or setting up trusts can help more of your money go where you want it to go – faster, privately, and with fewer costs.
This is where working with a Financial Planner helps. We look carefully at your savings, property, and family situation to see if probate costs might be a concern for you down the road. Based on what you want to achieve, we can then suggest and help you set up the right solutions – like making sure beneficiaries are named correctly, using tools like segregated funds, or connecting you with legal experts to set up trusts – all aimed at protecting your legacy.
Want to figure out the best way to set things up for your own situation? Let's talk. Contact us today for a simple chat about how you can protect your savings and make things easier for your loved ones.
Your partner in wealth and risk management solutions.
