One question that commonly comes up in estate planning conversations is how one can avoid probate, especially in provinces other than Alberta. However, it is often not clear what probate or a grant is and why it is important.
There are various types of grant applications depending on the particular estate situation. The two most common grants are: a grant of probate and a grant of administration. A grant of probate is applicable when the deceased has a will. On the other hand, a grant of administration would apply if there is no will.
In the situation where a deceased has a will, a grant of probate is an application to court to confirm the will of the deceased as well as the authority of the personal representative (also referred to as executor) to act. This offers very important protection for both the personal representative and the beneficiaries as it confirms the validity of the will and what it provides.
If there is no will, it is much clearer why a grant of administration is required. This is because there is no one with authority to act on behalf of the estate and no named beneficiaries of the estate. Therefore, the applicable legislation determines who has priority to apply to be the personal representative as well as who the beneficiaries are. As can be anticipated, this leads to additional time, expense and delay in dealing with the estate, not to mention the loss of choice regarding who you wish to name as your personal representative and beneficiaries. This is another reason why estate planning is so important.
So why do people want to avoid probate? The main reason is the cost associated with obtaining a grant, primarily the court fee. However, each province's court fee is different. In Alberta, the maximum court grant fee is $525 although in most other provinces (for example, B.C. and Ontario), court fees are a percentage of the value of the estate. Therefore, fortunately the Court grant fees are not a concern in Alberta.
However, there are other reasons people may want to avoid the need for a grant. They may want to streamline or simplify the estate process for their family, avoid delay and legal costs associated with obtaining a grant and or they have privacy concerns. However, as with many decisions in life, there are pros and cons to each option. Further, in the context of estate planning it is important to seek legal advice on recommended planning tools to address your specific goals and objectives. Sometimes, although the intention is good, steps taken to avoid probate actually result in uncertainty, delay, cost, family conflict and even litigation, especially when done without proper legal and tax advice.
In the end, a grant can provide important protection for your estate, personal representative and beneficiaries.
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