Probate: The Good, the Bad, and the Ugly
Probate isn’t exactly anyone’s favourite topic, but understanding it can save your family time, money, and a whole lot of frustration down the road. Here’s a straightforward look at what probate is, why it exists, where it causes problems, and the tools available to help you plan wisely.
What Is Probate?
Probate is the legal process that confirms two things:
- Your will is valid, and
- Your executor has the authority to manage and distribute your estate.
If you pass away without a will (called dying intestate), things get messier. The court decides who gets what based on provincial rules, not necessarily what you would have wanted.
Not everything you own goes through probate. Assets with named beneficiaries, such as life insurance, segregated funds, annuities, or registered accounts like RRSPs; can bypass the estate entirely, making the transfer much smoother.
How Probate Works
Your executor submits your will to the court.
The court confirms the latest valid will, ensures your executor is appropriate, and then grants them the legal authority to distribute your estate.
This process can be challenged (for example, if someone claims you weren’t mentally capable when the will was made), but once approved, the executor can work with banks, insurers, and other institutions to release funds and transfer property.
The Good Side of Probate
Despite the paperwork, probate does offer value:
- Clarity for small or intestate estates. It creates a clear, step-by-step process to follow.
- Protection from fraud. Probate helps prevent illegitimate claims and confirms who’ legally entitled to inherit.
The Bad and The Ugly
Here’s where probate tends to lose its charm:
1. Your Estate Becomes Public
Once probated, the value of your estate becomes public record.
Anyone can access it. That loss of privacy can expose heirs to unwanted attention or even financial exploitation.
2. Fees Can Add Up:
Probate fees vary by province and estate size, but they can be significant.
Add legal, accounting, and executor fees, and your estate can shrink faster than you would like.
3. Delays
A straightforward estate may wrap up in less than a year, but many estates take 12 to 18 months, or longer.
That means your loved ones may be waiting a long time for access to funds.
How to Reduce the Downsides of Probate
The good news: you are not stuck with the default. Certain financial products can help maintain privacy, reduce fees, and speed up the transfer of assets.
These include:
Life Insurance
Provides cash directly to beneficiaries and can help cover estate costs or taxes.
Insurance-Based Investments
These include:
- Segregated funds (GIFs)
- Payout annuities
- Insurance GICs
Because these are insurance contracts, you can name beneficiaries directly. The money goes straight to them (privately) without estate delays or probate fees. Many also offer guarantees that are not available in standard investment accounts.
The Bottom Line
A well-crafted will is essential, but it is only one piece of a complete estate plan.
By combining traditional planning with smart tools like insurance contracts and beneficiary designations, you can:
- Protect your privacy
- Reduce costs
- Speed up inheritance for loved ones
- Minimize complexity during an already challenging time
Planning ahead today can make a world of difference for the people you care about most.