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…I want to minimize estate settlement costs?
The main costs when settling an estate are probate fees and legal fees. Probate fees are 0.5% on the first $50,000.00 of estate assets, and 1.0% on the remainder. The lawyer’s fee tariff allowed by the court for estates is 3% on the first $10,000.00, 2% on the next $90,000.00 and 1.5% on the remainder.
Property and assets held in the name of the deceased alone usually require the Will to be probated in order to deal with them. Assets held jointly are not subject to probate.
You can minimize these costs by planning ahead to avoid the necessity of your Will being probated.
- If you and your spouse hold property as joint tenants, the property will pass to the surviving spouse without the need of probating your Will.
- If your spouse is deceased, you can hold property as joint tenants with one or more of your children and sign a trust agreement to protect the interests of other heirs.
- Joint bank accounts or GIC’s with right of survivorship will pass to the survivor upon presentation of a death certificate. Life insurance is paid directly to a named beneficiary.
- The year in which you turn 69 is the last year that you can contribute to your RRSPs. By the end of the year you turn 69, you have to choose to withdraw funds, transfer them to a RRIF or purchase an annuity. There are significant tax consequences to consider, and your financial consultant can instruct you on how to take advantage of marginal tax rates where possible. Speak to your financial consultant or accountant in this regard. Upon the death of the surviving spouse, all funds in RRSP or RRIF are brought into income for the year of death, resulting in taxation at a high rate.
- If you register stocks in the name of yourself and your beneficiary(ies) “or the survivor”, they can be easily dealt with after your death without probate.