Do You Need Probate in BC? When an Estate Can Skip It, and When It Cannot

After a death, one of the first questions an executor asks is whether the estate has to go through probate. The honest answer is that it depends, and not mainly on the will. It depends on what the deceased owned and how each asset was held.

This article explains what probate is in British Columbia, which assets pass without it, which almost always require it, what the court charges, and why some of the common strategies for avoiding probate create bigger problems than the fee they save.

What probate actually is

Probate is a court process that confirms a will is genuine, was made without fraud or undue influence, and is the last will the deceased left. The court's confirmation is a document called a grant of probate. Where there is no will, the equivalent is a grant of administration, which appoints someone to administer the estate under the intestacy rules.

The grant matters because the people and institutions holding the deceased's assets are entitled to see it before they hand anything over. A bank that releases funds to the wrong person is exposed; a grant protects it. So the question "do we need probate?" really means "will anyone holding an asset insist on a grant before releasing it?"

Assets that pass outside the estate

Several kinds of asset never form part of the estate at all, so probate is irrelevant to them:

• Property held in joint tenancy. When one joint tenant dies, the survivor takes the whole by right of survivorship. For land, the Land Title Office registers the surviving joint tenant as owner on production of the death certificate; no grant is needed. Joint bank accounts generally work the same way, subject to the bank's own requirements.
• Registered plans with a named beneficiary. RRSPs, RRIFs, TFSAs and pension benefits with a valid beneficiary designation are paid directly to that person.
• Life insurance with a named beneficiary. Paid by the insurer to the beneficiary on proof of death.

An estate consisting entirely of such assets may need no grant at all. That said, "outside the estate" does not mean "outside the law": tax can still be payable, and a designation or joint ownership can be challenged in some circumstances.

Assets that usually require a grant

• Land in the deceased's sole name, or held as a tenant in common. Under the Land Title Act, title must first be transmitted to the personal representative before the property can be sold or transferred, and the Land Title Office requires the grant to do that. There is no workaround for a house in one name.
• Bank and investment accounts above the institution's limit. Each bank and investment firm sets its own policy on how much it will release without a grant. Small balances are often released on the strength of the will and an indemnity; larger ones are not.
• Shares in a private company, debts owed to the deceased, and anything in dispute. Where someone's authority to act for the estate might be questioned, a grant is what settles the question.

What probate costs in BC

The court charges a probate fee based on the value of the estate passing through the grant. No fee is payable on an estate worth $25,000 or less. Above that, the fee is $6 for each $1,000 or part of $1,000 between $25,000 and $50,000, and $14 for each $1,000 or part of $1,000 over $50,000, which works out to roughly 1.4% at the top end. There is also a $200 court filing fee for the application itself, which is waived for estates under $25,000.

As an illustration, an estate of $1,000,000 passing through probate would attract a probate fee of $13,450 plus the $200 filing fee. Legal fees for preparing the application and administering the estate are separate from the court's charges.

The "avoiding probate" trap

Because the fee is calculated on the value of the estate, there is an obvious temptation to move assets outside it: putting an adult child on title to the house as a joint owner, adding them to bank accounts, or naming one child as beneficiary of a registered plan with an informal understanding that they will share.

These steps can work, but each carries risks that are easy to underestimate. Adding a joint owner is a transfer of a real interest in property: it can have tax consequences, it exposes the asset to that person's creditors or a marriage breakdown, and it means you can no longer deal with the asset alone. Where a parent adds one child to an asset, the other children may later argue it was meant to be held for the whole family rather than kept, and that argument is a common source of estate litigation. A probate fee of 1.4% is a cost. A lawsuit between siblings is a different order of magnitude.

There are sound ways to reduce what passes through probate, and a good estate plan will use them deliberately, with the reasons written down. The mistake is doing it informally.

Before the executor does anything

Start with a list of every asset and how it was held: sole name, joint, or with a designated beneficiary. Then ask each institution, in writing, what it requires. That exercise usually answers the probate question on its own. If a grant is needed, bear in mind that the application has its own procedural steps and that, once the grant issues, BC's 210-day waiting period generally applies before the estate can be distributed.

Handling an estate? Find out whether probate is needed before you file anything

Our probate and estate lawyers can review the assets, tell you which ones need a grant, estimate the probate fee, and prepare the application. If you are planning your own estate and want to reduce what goes through probate safely, we can do that too.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.