Estate expenses: numerous disparities across Canada

In Canada, heirs from several provinces pay estate probate fees. How these fees are applied varies from one province or territory to another.

Some escape it. In Manitoba, no probate fees apply, regardless of the value of the estate. In Quebec, there is nothing to pay either if the succession is determined by a notarized will. Notarized wills do not have to be certified.

On the other hand, there is a cost to having a non-notarized will certified. Quebec’s Commission des services juridiques (Legal aid) says, on its website, that the costs of their probate assistance service amounts to $643, or $470 in fees and $173 in legal costs. Anyone financially eligible for free legal aid will pay nothing. 

The fees to have a non-notarized will certified in Quebec will be higher for those who are not eligible for legal aid. 

In a web page entitled What is probate? Plus 15 other will and probate questions answered, Sun Life points out that in Quebec “a court or notary must validate by the probate procedure handwritten wills and wills made in front of witnesses…fees are applicable – they’re generally more than $1,000.” 

The need to have a non-notarized will certified becomes necessary in the event of a dispute. A dispute can, for example, arise during a request for assistance for a dependent, alimony or a challenge to the will.

Segregated funds 

In other Canadian provinces and territories, heirs will have to pay probate fees, except for amounts from an insurance policy held by the deceased. Segregated funds are an example, because they allow holders to designate one or more beneficiaries. The sums will thus pass to the designated beneficiaries without having to go through the will. 

On its website, Canada Life has published a list of provincial rates for probate fees and estate administration tax. “Probate is a court process that certifies a will so that third parties have the confidence and protection that the will is the last will of the deceased and that the estate trustee has the authority to act on the estate’s behalf,” explains the insurer.

While the rates differ from one place to another, the calculation of fees and the legal process are similar. “The amount of probate is generally based on the fair market value of the assets in the estate at death,” explains Canada Life.

Its table of provincial rates for probate fees and estate administration tax indicates the taxes and fees payable in the provinces and territories of Canada, excluding Quebec. The insurer bases its example on the duties payable on an estate whose total assets amount to $1,000,000.

Regional vice-president, Quebec market, of Manulife, David Parent says that his company offers advisors a tool for comparing inheritance fees, “in jurisdictions where probate fees apply.” He explains that the tool is used to demonstrate to their clients the savings that an estate can achieve by allowing the proceeds of segregated fund to be transferred directly to designated beneficiaries, without going through a will.

“Recognizing that clients need growth opportunities and competitive pricing, we have focused our efforts on promoting core segregated fund features because that is often all it takes to benefit from the possibility of protection against creditors, the possibility of avoiding probate fees and the confidentiality linked to a designation of a beneficiary", affirms Parent.

Segregated funds, he says, are very attractive because they responds to a very important request from advisors: “quick and easy settlement in the event of death, which facilitates the transfer of assets to loved ones,” concludes Parent.