Written by Clarence Peters
She had known it was coming for few months now, and finally the day came. Funeral planning went smoothly, the children came and left, and now many business matters needed attending to. “Let’s see” she thought, there’s the driver’s license to cancel, CRA to notify, the bank to visit, and a few other estate related tasks to do today.
She’s quite proud of herself for handling the grief and the details so well, but still, it’s so hard to do much of it alone. She’s prepared though, and so she walks into the bank, account statement in hand, along with the Will. She knows she will need it to transfer his account to her name. She has an appointment with the manager, whom she met a few times before.
The manager knows she’s newly widowed and expresses his condolences. She acknowledges the kindness, then gets to her request. He shifts in his chair just a little and she reads his discomfort. “What’s wrong?” she inquires. His words are shocking. “The balance on his account is much higher than we can give you without proof…” “What do you mean, here’s the Will, and I’m executor and sole beneficiary of his estate! Besides, you know me!” she interrupts, her eyes growing wide. As gently as possible he explains that the bank policy won’t allow him to release the money without documentation from the courts that the Will is her husband’s last, and that all has been properly arranged. The energy drains from her as he explains the process and the cost of obtaining “Letters Probate”, and that it will probably require a lawyer. It will be weeks, if not months before she can access the money and to obtain Letters Probate, the province will charge a $7 fee for every $1,000 of assets he solely owned.
Scenes like this repeat themselves all too often, as some people don’t understand the importance of structuring ownership correctly. For married couples, probate can and should usually be avoided.
Besides bank accounts solely owned by the deceased, solely owned land titles are another common cause for needing to obtain Letters Probate. Some examples of this arise when:
- One of the spouses has a house or land and then marries. Time goes by, and, while the intent is for the spouse to inherit, the spouse’s name is never added to the title as a “joint tenancy”. Where there is a joint tenancy, and one owner dies, the remaining owner (or owners) retain title to the property, all without Probate.
- A title is structured as a “tenancy in common”, a structure where people share ownership, but have independent control of their share. Probate is required of common tenancy.
- In other cases, people forget they have an inherited mineral title which is subject to all the same rules of succession as any land title.
Another common trigger for needing Letters Probate is registered accounts. As an example, perhaps your spouse started her TFSA while single. She intends for you to inherit but never added you as “successor subscriber” or as beneficiary. Should she pass away without doing so, the account becomes the property of her estate, and the bank may require probate to release the funds. Likewise, registered products like RRSPs and RRIFs should be updated when there is a change in beneficiary.
A cautionary note is in order. At times, it may be in the interest of the family to expect and plan for probate. The assets or land titles may be kept with sole ownership quite on purpose, as in the case of second marriages, blended families, or inherited property. The Will typically explains the destination for such assets and do so consistent with a spousal agreement and applicable provincial legislation.
It’s hard enough to go through the loss of a spouse. No one needs surprises that are costly, time consuming, and unnecessary. It’s best to review all of your holdings from time to time with an estate professional. Should you come to Amity for this planning, we will review all your assets with you, and even do a complete land title search as part of our thorough service. You deserve the peace of mind.