Jun 10, 2022
How long does an executor have to settle an estate in Ontario?
Settling an estate is a challenging responsibility that can often take between six months to a year in Ontario. Here’s what you need to know.
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If you’re going through probate—or if you’ve just been named an estate executor and know that the probate process is coming up in your immediate future—you’ve probably noticed that a huge part of the job includes listing, categorizing, and appraising the assets that make up the estate. In some provinces, the executor might even need to provide a list of assets from the estate to the probate court before they can even apply for probate. Either way, it’s a pretty time-consuming job. That’s why it’s good to know what assets are necessary for the probate process, and perhaps more importantly, which ones are not.
We regularly share relevant information about wills and estates.
Before we start covering what assets aren’t included in probate, let’s have a quick refresher on what assets are actually included. An estate executor will need to list assets such as:
While the list above may seem to cover almost every asset a person could possibly have, there are some assets that don’t make the cut and don’t need to be listed and reported to the probate court while settling an estate. This means that the executor doesn’t need to get involved, and the transfer of these assets is usually pretty seamless and predetermined. Those assets are the following:
While insurance policies like life insurances are typically assets listed for probate, their status changes if a beneficiary was named on the policy before the estate holder’s death. This also applies to pensions and retirement accounts such as IRAs, TFSAs, and RRSPs where the beneficiary immediately receives possession of the account when the original account holder passes.
When speaking of joint accounts for accounts like chequing and savings accounts, there are two classifications: Tenancy in common and joint tenancy. While tenancy in common refers to accounts where two or more people own individual shares of an asset without any claims to the shares of anyone else, joint tenancy means that an asset is jointly held and that 100% of that asset goes to the surviving account holder once the primary passes away. In the case of probate, the only accounts that would not need to be listed to the court would be joint accounts that were held in joint tenancy.
If you’re curious about learning more on joint accounts, check out our article here.
In fact, joint tenancy doesn’t just refer to joint accounts. You can hold a variety of assets in joint tenancy, such as real estate property or stock shares. Let’s say you and your spouse are joint owners of your house, and your spouse passes away. The ownership of that house will automatically get passed onto you, and the house (more specifically, its value) won’t have to be included in the probate process.
Any assets that are held in a living trust do not need to go through probate. A living trust is a document bestowing upon a trustee the right to manage the trustor's assets while they're still alive, usually for the benefit of the trustor’s eventual beneficiaries. Because a living trust holds assets for beneficiaries, the transfer of assets is clear and no probate court needs to get involved.
Basically, all assets that have some sort of beneficiary designation can often skip probate, since they go directly to your heirs. If you’re currently in the process of estate planning, then simplifying your estate and ensuring there are clear beneficiaries for your assets can often significantly cut down the probate process and save your future estate executor and your beneficiaries a lot of money, time, and stress.
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