Oct 24, 2022
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Probate is a process that verifies a will under British Columbia laws. Unfortunately, estate settlement processes often have to go through probate court, even if the deceased leaves behind a will. Large estates, as well as particularly complex ones, typically trigger the need to go through probate.
For example, if your grandfather kept his savings in the bank, the bank may require proof that his will is in order, as required by B.C. law. To do so, you'd probably have to go through probate court and receive official authorization to act as the estate’s executor before you can withdraw the funds.
When you go through probate court, you have just one year to complete the estate settlement. If you've lost someone you were close to, a year can zoom by quickly and probate adds to the stress of a difficult time — especially if you are the executor of the will!
Additionally, there are many fees associated with the probate process.
According to the probate fee act of British Columbia, probate fees are determined by the size of the estate.
The fees are as follows:
As you can see, the larger the estate, the higher the fees. If you'd like to know more about the costs accrued during probate, you can check out our detailed post about all the probate fees in BC here.
Is your estate worth more than $30,000? As mentioned, the state value triggers the probate process in British Columbia. Fortunately, there are strategies that can be implemented before death that will help spare the cost and hassle of probate court.
Here is a summary of ways to avoid the cost of probate:
As someone grows older, they may decide to set up a living inheritance, which allows them to start transferring ownership of their assets to their heirs during their lifetime. You can do this with property, money, vehicles, investments and other assets. Beneficiaries do not have to pay taxes on gifts from a living inheritance.
It is critical to appoint beneficiaries on retirement accounts and life insurance policies. This allows these assets to transfer to the heirs directly, with no need to go through probate. As a precaution, it's a good idea to name secondary beneficiaries as well.
By putting the names of beneficiaries on assets, a testator can institute joint ownership. Through the right of survivorship, the deceased’s portion of the assets passes directly to the named owners on the account. Keep in mind that naming multiple people as joint owners may cause disputes among beneficiaries. They may also have to pay capital gains for the property transfer tax.
Setting up a trust allows a testator to transfer assets into it during their lifetime. When they die, the trust makes it easier to distribute the property as specified, since assets in the trust are separate from the estate.
With the help of knowledgeable estate planning professionals, you can save your heirs time and money. Contact the estate planning team at ClearEstate to set up a free consultation today.
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