Can Probate be Waived in Ontario? Here's What You Need to Know
When managing an estate in Ontario, probate often represents an essential step, validating a will and granting authority to executors to handle estate affairs. However, many clients ask whether it's possible to avoid or waive probate, aiming to simplify administration or reduce probate fees. This guide clearly explains under what circumstances probate can be waived and explores strategies available in Ontario.
What Exactly is Probate in Ontario?
In Ontario, probate - officially known as obtaining a "Certificate of Appointment of Estate Trustee" - is a legal process that confirms a will's validity and grants authority to the executor to administer the estate. Probate can involve significant administrative work and expenses, including estate administration taxes, also known as probate fees.
When Can Probate be Waived in Ontario?
Probate isn't always required. Certain situations allow for the waiver or avoidance of probate, including:
Assets with Joint Ownership
Assets held jointly with rights of survivorship, such as bank accounts, real estate, or investments, automatically pass directly to the surviving owner without the need for probate.
Example: Maria and John own their home in Windsor jointly. Upon John's death, the home automatically transfers to Maria without probate.
Assets with Beneficiary Designations
Assets like RRSPs, RRIFs, TFSAs, insurance policies, and pensions that name a direct beneficiary other than the estate typically bypass probate.
Example: Tom names his daughter directly as beneficiary of his RRSP. Upon his death, the RRSP passes directly to her without needing probate.
Small Estates (Under $150,000)
Ontario introduced simplified probate procedures for small estates (valued at less than $150,000), potentially reducing the need for full probate. However, even small estates typically require some form of formal validation.
Multiple Wills Strategy
The use of multiple wills, a common strategy among business owners and individuals with privately held corporate assets, allows certain assets to bypass probate. By creating primary and secondary wills, probate can be limited to assets specifically requiring validation.
Example: Robert owns a family business in Essex County and has two wills. His primary will covers personal assets requiring probate, while his secondary will deals exclusively with corporate shares, which can bypass probate entirely.
Practical Considerations and Risks
While avoiding probate can save on estate administration taxes and simplify processes, it also involves potential risks:
Joint Ownership: May expose assets to creditors of joint owners or lead to disputes among beneficiaries.
Beneficiary Designations: Require regular updating to reflect life changes such as marriages, divorces, or deaths.
Multiple Wills: Must be carefully drafted by experienced estate lawyers to prevent legal conflicts or unintended consequences.
Key Takeaways
Probate can be waived in Ontario under specific circumstances such as joint ownership and direct beneficiary designations.
Small estates under $150,000 benefit from simplified probate procedures.
Multiple wills are an effective strategy for bypassing probate on certain types of assets, notably corporate shares.
Each probate-avoidance strategy carries its own risks and requires professional legal advice for optimal effectiveness.
Still Have Questions About Probate in Ontario?
Managing probate and estate administration can be complex. At Mariotti Law Group, our experienced Ontario estate lawyers can provide tailored advice to protect your estate and reduce unnecessary probate fees.
Contact Mariotti Law Group today to schedule your personalized consultation and ensure your estate planning aligns clearly and effectively with your objectives.
Disclaimer: This article is for informational purposes only and does not constitute legal advice or create a solicitor-client relationship. For personalized advice, please consult Mariotti Law Group directly.