Estate Administration and Probate

Probate is a legal process that validates a will and allows for the orderly distribution of assets according to the deceased person’s wishes.

Probate fees are payable by an estate on the value of the assets it contains. They are calculated as follows:

1. No fee for the first $25,000 of estate assets;
2. $6 for every $1 000 or part of $1 000 by which the value of the estate exceeds $25 000 but is not more than $50 000; and 
3. $14 for every $1 000 or part of $1 000 by which the value of the estate exceeds $50 000. 

In British Columbia, the executor has one year to determine the assets of the estate, apply for probate and settle the estate. This is often called the “executor’s year”, and the executor cannot be required to distribute the estate before this time has elapsed. In practice, there may be numerous factors that result in the estate taking significantly longer to administer, including processing speed of the court registry, time to sell property, issues winding up businesses, tax issues, litigation and other issues. 

The BC laws governing probate and estate administration are contained within the Wills, Estates and Succession Act (https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/09013_01), and Part 25 of the Supreme Court Civil Rules (https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/168_2009_03_1#part25)

Creditors of the estate are paid before beneficiaries receive their inheritance. After the debts are paid, specific gifts (gifts of specific amounts or items) are paid to beneficiaries. Whatever is left over after is paid to the residual beneficiaries. 

If an estate does not have to pay all of its debts, then section 170 of the Wills, Estates and Succession Act establishes the order in which people must be paid. 

An executor or administrator of an estate is required to provide a copy of the will to each beneficiary with a Form P1 Notice, which advises beneficiaries of some of their rights in relation to the estate. 

A formal reading of the will is not required in British Columbia, and the will and P1 Notice is usually delivered by mail or email. 

No, however, there are probate fees. The probate fees are established by the Probate Fee Act and are calculated as:

1. $6 for every $1 000 or part of $1 000 by which the value of the estate exceeds $25 000 but is not more than $50 000, plus;
2. $14 for every $1 000 or part of $1 000 by which the value of the estate exceeds $50 000.

Probate fees are paid by the executor or administrator of the estate and beneficiaries do not have remit anything further. 

Money that beneficiaries inherit from an estate is not taxable. However, the compensation an executor receives for administering an estate is. 

The term “resealing of an estate grant” typically pertains to the process of validating and recognizing a foreign grant of probate or letters of administration in a different jurisdiction. This is a legal procedure that occurs when a person who has assets in one province or country passes away, and they have a grant of probate (or letters of administration) issued in one jurisdiction, but their assets are located in another jurisdiction.

Some common examples of property not subject to probate in British Columbia:

1. Property held jointly. For real property, this applies to joint tenants but not tenants in common.
2. Assets with a designated beneficiary, such as a TFSA or RRSP.
3. Property owned in trust, subject to the terms of the trust.  

Some ways to avoid or reduce probate in British Columbia are:

1. Give things away before you die. If you know you will not need an asset during your lifetime, you can give it away before you die. 
2. Transfer property to joint ownership. This should be used with caution and after receiving legal advice from an experienced estate lawyer. 
3. Use beneficiary designations on investments. Just be aware of the potential tax consequences to your estate. 
4. Transfer your assets to a trust, such as an alter ego trust, which allows you to use its assets during your lifetime and transfers what remains to your beneficiaries after your death.