What Steps Can You Take to Avoid the Probate Process in Canada?

 

Probate is the process where a person’s assets are administered and distributed once they pass away. A probate court analyzes all the assets a person owns, including their monetary bank accounts, real estate properties, and intangible and tangible investments, determines the deceased's beneficiaries, and distributes the assets among them based on the probate laws and regulations. The probate process is initiated when a person passes away, and their assets have to be transferred to their beneficiaries, with or without the presence of a will or another form of an estate plan.

In most provinces of Canada, the probate process is lengthy, complicated, and expensive. It takes months for probate courts to gather the details of all the assets a deceased person owns and locate all their beneficiaries. Additionally, they also have to appoint an executor who oversees the transfer of all these assets, ensuring that everyone gets their legal share. Many legal disputes arise when beneficiaries challenge the court’s distribution or the executor’s status, making it difficult to distribute assets on time.

Additionally, challenging or defending the executor’s and the court’s decisions makes the probate process even more complicated and expensive. Taking things to probate makes the information of the deceased and their assets public, leading to further complications. Therefore, the deceased should take certain steps that help their beneficiaries avoid the probate process. Additionally, the inheritors can also stick to some methods, hire estate lawyers, and avoid the probate process while distributing the assets. This will make the distribution of assets easier, quicker, and more affordable.

This article discusses the steps you can take to avoid the probate process in Canada.

 

Transfer the Property in Your Life

Once you have rounded down your property and decided on your beneficiaries, it’s advisable to transfer the ownership to your life. Instead of adding the properties to your estate plan or waiting for the probate court to divide them among your property, you should give it to the person you want to. Even though you can’t gift away all of your real estate properties while you’re living, since you need some of them, estate lawyers recommend gifting away as many as possible.

However, this method has some complications. If you want this property to be the inheritor’s part of your estate, hiring an estate lawyer and asking them to write it in the form of an estate plan is advisable. If you give them the property without mentioning that it was their share in your estate, they can go to the probate court once you pass away and demand another part of your estate.

 

Add Your Beneficiary to a Joint Ownership

Another way to help your inheritor avoid probate is to build joint ownership with them on the real estate property you plan to transfer to them. Through this way, if you pass away, your joint owner will automatically get the property. However, you need to understand the types of joint ownership before making a beneficiary your joint owner. In some provinces, you can only do joint ownership with a blood relation or your spouse.

Therefore, you might want to hire an estate lawyer and look for other options for joint property ownership if you want to transfer a property to a friend or a non-blood relative. You also need to ensure that the joint property has the right of survivorship. This means that your property will be automatically transferred to your beneficiary when you pass away. This method prevents other beneficiaries from claiming a right on this property.

 

Set Payable-On-Death Accounts

Another method to avoid the probate process is to set a Payable-On-Death, also called a POD. If you have a financial account in a bank or a retirement fund, you can appoint a beneficiary for these accounts during your life. Many people make the mistake of appointing their beneficiary as the joint owner of the account, but that often leads to fraud. However, by setting a POD, you can ensure that the beneficiary won’t have any rights to your account and financial assets unless you pass away.

You can hire an estate lawyer to help you set up the Payable-on-Death option on all your financial accounts. Many banks also provide simple forms you can fill out to appoint a beneficiary easily. Once your POD is set, the finances will be transferred to your beneficiary once you pass away. Your account will also be automatically closed. Another benefit of appointing a POD is that you can add two or more beneficiaries to your account. In this case, the amount is divided between all the joint beneficiaries.

 

Set Transfer-On-Death for Your Non-Financial Accounts

While POD is the ideal option for transferring financial assets in financial accounts, they don’t work for non-financial accounts like stocks, bonds, or virtual currencies. Therefore, you can ensure the passing of your non-financial assets by setting a Transfer-on-Death, also called TOD.

In this process, the title is already transferred when you set the TOD security, but the monetary value of the stocks and the bonds are transferred when you pass away. You can also specify if you want your inheritor to receive the stocks and bonds or their monetary value at the time of your passing away. Like POD, you can also set joint beneficiaries for TOD and ensure your non-financial assets are distributed between 2 or more beneficiaries.

Transfer-On-Death for Properties and Vehicles

Besides setting a transfer-on-death for your non-financial accounts, you can also benefit from this option if you want to transfer properties and vehicles to your beneficiaries upon your death. This works the same way as the TOD for non-financial accounts like stocks and bonds. However, in this process, you can’t nominate joint beneficiaries, and only one person will receive a single property or vehicle. This method will help your inheritors avoid the probate process in Canada.

 

Form a Will

Estate lawyers agree that one of the best ways to help your inheritors avoid probate in Canada is to ensure that your estate planning is in order. For this, it’s advisable to form a will, mentioning all your assets and beneficiaries and how your assets will be distributed. Estate planners also advise updating your will regularly to match your changing assets, financial position, or beneficiaries.

 

You should also add a beneficiary to your will to ensure that the beneficiary executes your will according to your wishes. This will stop your beneficiaries from fighting over your assets slowing down the probate process. If your will is updated, your will won’t be declared invalid or can’t be challenged in court.

 

Opt for a Living Trust

If you don’t want to form a will or have a large estate, you can opt for a living trust, which is another estate planning option. In a living trust, you transfer your assets to a reliable person or organization and make them the trustee of your estate.

Once you pass away, your trustee can transfer your assets to your beneficiaries according to your wishes. By setting up a living trust, you won’t have to go through probate, as your beneficiaries will inherit their share in your estate directly.

 

Get Started with Probate and Estate Lawyers to Avoid the Probate Process

With the help of wills and estate lawyers, you can ensure your estate planning is complete before you pass away. This technique will help your beneficiaries avoid the probate processes and inherit everything directly from your estate planning documents. Nanda & Associate Lawyers is one of the leading law firms in Mississauga, Brampton, and Toronto. This boutique law firm has a team of professional estate lawyers who can guide you through the estate planning and probate process. These wills and estate lawyers can help you prepare the required documents to manage and transfer your estate. Additionally, their estate lawyers also handle probate administration, ensuring that the will or the trust is interpreted and executed correctly and timely. Their team can also handle estate planning and probate challenges by defending the will.

Besides providing probate and estate administration services, Nanda & Associate Lawyers also has a team of immigration consultants who guide immigrants, helping them start a new life in Canada. These immigration lawyers have in-depth information about immigration law, helping people fill out applications and apply for a temporary visa or permanent residence status. Additionally, they also have personal injury lawyers who help accident victims get financial compensation or disability benefits. Their family law lawyers can handle drafting and updating prenuptial agreements, representing ex-partners in divorce cases, and providing legal guidance for child custody issues. Their commercial real estate lawyers in Ontario oversee the buying, selling, and leasing out of commercial buildings for companies.

Book a consultation session with their estate lawyers, draft a complete estate plan and update it regularly, and help your inheritors avoid the lengthy and expensive probate process in the future.

 

Disclaimer: This article is only intended for educational purposes and shouldn’t be used as a substitute for legal advice.