In Canada, probate refers to the process of collecting and allocating a person’s assets after his death. Because the legal process implies hefty attorney fees, probate taxes and Court costs, it is highly advisable to plan your estate ahead. In general, avoiding probate implies making sure that certain assets don’t become a part of the probate estate. In order to meet this objective you have several options at your disposal, alternatives you should discuss thoroughly with a probate lawyer.
- Add a beneficiary to your life insurance
If your life insurance includes a named beneficiary, then the policy is paid directly to that person. Consequentially, the funds are not considered part of the probate estate and you will not be forced to pay taxes and fees. On a side note, it would be wise to include a second beneficiary in the life insurance in the unfortunate event that the primary beneficiary precedes you.
- Keep your assets in bearer certificates or cash
By keeping your assets in cash or stock, there is a chance they might be excluded from the probate estate and hence, reduce the amount of taxes charged to it. Bearer certificates are similar to checks, meaning they are payable in cash and can be redeemed by whoever holds them.
- Title your assets to a joint owner
The assets that are held in a joint account with rights of survivorship that are passed directly to the surviving owner. While it is true that titles in joint accounts never become subject to probate, there are several aspects you should discuss with your probate attorney before naming a joint owner on your assets.
- Set up a trust fund
By setting up a trust fund, you title your property to be held by an appointed trustee of your choosing. Because the trustee will own your property after you pass away, it doesn’t become part of the probate estate.