The article “Death And Taxes: How To Navigate The Probate Process To Keep Tax Costs In Check” was originally published on Financial Post on March 24, 2020.

There are ways to reduce or avoid probate fees and reasons to try to, but there are some things to take into consideration first.

This is the second in a three-part series on estate costs. The first looked at the tax consequences of dying. The next will consider estate settlement costs.

Probate is a legal process to confirm a will is valid and the executor can proceed with settling the estate and distributing the assets to the beneficiaries. It involves the payment of probate fees or estate administration tax to the provincial or territorial government.

Some people will go to great lengths to avoid probate and in the process may expose themselves to other potential costs. Others overlook probate entirely, when simple steps could be taken to negate it.

Five out of the thirteen provinces and territories — Alberta, Quebec, Northwest Territories, Yukon, and Nunavut — charge flat fees for probate or estate administration taxes of less than $1,000. Out of the other eight, some have exemptions or graduated rates, but the percentages range from 0.4 per cent of an estate in Price Edward Island to 1.695 per cent in Nova Scotia. A $1,000,000 estate in Nova Scotia has $16,258 of probate. Ontario and B.C. are both high probate provinces, with fees of 1.5 per cent and 1.4 per cent respectively on estates exceeding $50,000.

Probate applies to assets that pass through an estate and are distributed by way of a will. As a result, there are assets that are exempted. One of the most common exceptions may be in the case of joint ownership.


When spouses own assets jointly with rights of survivorship, whether it is a bank account, investment account, or real estate, that asset passes to the survivor without passing through the will and avoids probate.

Real estate can be owned as joint tenants with rights of survivorship or as tenants in common. Tenancy in common differs from joint tenancy in that the deceased can leave their share to a beneficiary or beneficiaries in their will. In this case, despite the assets being held jointly, there would be probate payable.

Joint ownership of an asset with an adult child by seniors is becoming increasingly common. While it may be a method to pass assets to a child or children without having to pay probate on that asset, the savings may be small relative to the potential risks (especially in Alberta, Quebec, and the territories).

A risk of joint ownership with a child is that adverse tax consequences may result without proper planning and documentation. These implications can include triggering a capital gain for a parent or reducing the tax-free principal residence exemption on a home.

A more significant risk may be losing control of the asset to the child whose name is added. Even if someone trusts their child, a divorce, lawsuit, disability, or death may result in the child’s name on the asset putting a parent’s estate at risk.


Investment accounts like TFSAs, RRSPs, RRIFs, and other registered accounts allow the naming of beneficiaries. Life insurance policies also name beneficiaries. Beneficiary designations can in some cases avoid probate.

A spouse can be named as a successor holder of a TFSA or a successor annuitant of a RRIF and essentially just take over the account on the death of the account holder. A spouse or child can be named as beneficiary of a TFSA, RRSP, RRIF, or other registered account, with the account payable directly to them on death.

When an individual or individuals are named as successor holders, successor annuitants, or beneficiaries, the account is excluded from probate. When the estate of the deceased is the beneficiary of the account, it is subject to probate. The same applies with life insurance policies payable to the deceased’s estate.

It may seem that naming beneficiaries is advisable to avoid probate, but once again, there are potential risks.

If minor children or grandchildren are named as beneficiaries, there may be limited ability to dictate the terms of the assets to be held in trust, the trustee for the assets, or the distribution of the assets. An account or an insurance death benefit may simply be held in trust until the minor child attains the age of majority (18 or 19 depending on their province or territory of residence), with little control in the interim, and fully distributed all at once. This may be inferior to having a testamentary trust established in a will for that minor, dictating extensive terms for the trust management and distribution.

Another possible risk, although unlikely, is that an aging parent could become incapacitated and one of the beneficiaries of an account or insurance policy could die before them. If the beneficiary designation was “estate,” the will could ensure the share that beneficiary would have been entitled to goes to their children, for example. Naming them as a direct beneficiary limits the ability to account for such contingencies.


There are other potential solutions to avoid probate. One option for people over the age of 65 with large estates is to consider the use of a specific type of inter vivos trust. A joint partner trust can be used for married seniors and an alter ego trust for single seniors to hold assets to be used only for them during their lives and distributed directly to beneficiaries without paying probate on their death. There are other benefits and drawbacks to these types of trusts, but they can definitely be used to avoid probate.

Some provinces allow secondary wills that do not require probate to distribute certain assets. A secondary will would be written in addition to a primary will, so that an individual had multiple wills for different assets. Private company shares, unsecured loans, personal effects, or foreign assets can be dealt with in wills that are prepared to supplement an individual’s primary will.

Gifting assets during one’s life can be another method to reduce an estate value and the resulting probate fees payable on death. Assets someone might still need or want should not be gifted directly. That may seem obvious, but that does not stop people from gifting those types of assets to their children to avoid probate fees that are small on a percentage basis, with serious potential risks to giving up control.

There are ways to reduce or avoid probate fees. There are reasons to try to as well. Before considering any of them, it is important to summarize your estate, figure out the tax implications, determine what would be subject to probate, and consider what steps, if any, should be taken to mitigate probate.

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto, Ontario. He does not sell any financial products whatsoever.