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Probate- What is It?

Probate is a term that refers to the general legal process and proceedings that go on after a person dies. Probate includes several different things, including taking a look at the value of the property owned by the deceased, handling any remaining debts or tax debt that the deceased had in their name and other tasks. Generally, the entire amount of property that the deceased had in their possession will be inventoried and that property will be distributed according to the will.

The validity of the will also has to be established, though this is something that is more procedural.

What Happens?

Your executor will be the person responsible for handling probate. They will find out where all the property you own is located, get everything together, make sure that your will is executed as you wished and make some decisions. They may, for example, decide whether or not to sell off some investments, sell off some of your property and so forth. You’ll have to work with your executor to ensure they are capable of making the decisions you would’ve made were you still alive.

One of the big questions with probate is how the value of your possessions is determined. There are misconceptions about this that many people have regarding what is included in the overall value of an estate and how those elements of the state are valued themselves.

 Different Provinces Different Rules

The province in which you live will determine how your assets are valued and the overall probate fees. In any province where the deceased has property, probate fees will be assessed. Each of the individual provinces has its own legislation in this regard with different methods to determine what is property and what it should be valued at.

British Columbia, for example, requires that any benefits from  a settlement in a registered pension plan are not paid out in a lump sum to an entitled spouse and keeps them locked-in, distributing them as retirement income. The province-specific elements also include fees. In British Columbia, there are guidelines provided by the Ministry of the Attorney General for probate fees, but these are guidelines.

For example, in BC:

  • the first $25,000 ($0.00 to $25,000.00) = $208
  • the next $25,000 ($25,000.00 to $50,000.00) = $150
  • over $50,000 = 1.4% of the estate, or $14.00 per $1,000.00

Therefore $1,000,000 estate could result in $13,658 in probate fees.

The probate process can be complex but we can help you navigate through it successfully. Talk to us and we can give you financial advice that can help you to understand.

 

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