What is Probate?
Where death and taxes meet; Probate is the process that affects a person’s Will after their death. Probate, or a Grant of Probate, is an order from the Surrogate Court authorizing the individual named in the Will as the Executor to legally deal with the assets and debts of the Deceased. If there is no Will, then the Court Order is referred to as a Grant of Letters of Administration, or simply Grant of Administration.
What is in a person’s Estate?
The Estate of a deceased person consists of assets that were in that person’s name, and that person’s name alone. Items that generally do not form part of the Estate are assets that are held jointly with another person and assets, such as RRSPs and Life Insurance Policies, where there is a designated beneficiary. Often spouses hold all major assets jointly and the surviving spouse has been designated as the beneﬁciary of registered funds. In those circumstances it would probably not be necessary to apply for a Grant of Probate.
I have been named as the Executor in the Will; do I have to start applying right away?
Probate must be obtained within a reasonable period of time. It is important that everything be tidied up as quickly as possible and they wish the process to be started immediately. For some Executors, it is important. For others, the shock of the death is such that a period of time is required before they are mentally and emotionally able to deal with the Estate issues. In either case, it is important you understand that when dealing with Estates there is virtually nothing that has to be done right away. However, there may be some assets, tax considerations, or debts that require the application to proceed as expeditiously as possible.
How do I arrange for payment of the funeral costs?
Public policy requires that funeral expenses are paid and, accordingly, funeral expenses are the ﬁrst charge against the assets of the Deceased. Banks are fully aware of this and are most helpful in utilizing funds that are in the account of the Deceased to pay for the funeral expenses without the necessity of having to wait for a Grant of Probate. If the Deceased had a bank account, all that is required is that the bank be given a copy of the funeral director’s statement and the bank will arrange for payment of the account from the funds that it is holding.
Speaking of expenses, what are the costs of obtaining Probate and how long does it take?
The legal costs incurred in obtaining Probate will be determined by the complexity and monetary value of the Estate. Other expenses, such as court costs, registry searches, and GST will increase the total costs of obtaining Probate. The length of time required to get Probate varies from Estate to Estate.
The Court requires that the Application for Probate include the value of all of the assets and debts of the Deceased as at the date of death. The more complex and varied these are, the longer it will take to have them valued. Often difficulties are encountered in obtaining these values which can cause delays in obtaining Probate.
When is the Estate distributed to the beneﬁciaries?
The length of time involved before an Estate can be distributed depends on a variety of factors, including the complexity of the Estate and the various tax considerations that have to be dealt with by the Executor. One of the duties of the Executor is to pay all of the debts of the Estate, including taxes, prior to distributing the Estate to the beneﬁciaries. It is imperative that the Executor receive full and competent tax advice. Executors often employ accountants to assist them with the tax issues. Sometimes the tax issues can be easily and speedily resolved; on other occasions it can be months or even years before all the tax issues are settled. This does not mean that none of the Estate can be distributed. All it means is that the Executor has to ensure that sufficient Estate funds are withheld to satisfy any tax liabilities. Usually the Executor will require that the beneﬁciaries sign a Release before there is a partial or full distribution of the Estate.
Will & Estate Planning Lawyers Serving Sherwood Park, Alberta, Yellowknife and Communities of the Northwest Territories
If you require assistance with the creation of your Will or if you need assistance with Probate, contact Ahlstrom Wright for a free consultation.