An estate worth $500,000 could pay up to $7,000 in probate fees, depending on the province. This is why it’s so important to understand what are probate fees in Canada. This government charge is taken from an estate’s value before the family receives anything. Read on to discover the simple strategies that can help you keep more of that money in your family’s hands.
The Purpose of Probate and Its Fees
Probate is the official legal process a court uses to confirm that a will is valid. The fees are what the provincial government charges to provide this service, which protects everyone involved.
How to Calculate Probate Fees
Knowing how to calculate probate fees is key to understanding the potential cost. The exact amount is based on the value of the estate and the specific rules of your province.
- Varies by Province: Every province and territory in Canada sets its own fee structure.
- Based on Estate Value: The fee is usually a percentage of the total value of assets like property, bank accounts, and investments.
- Example Calculation: For instance, Saskatchewan charges $7 for every $1,000 of the estate’s value. A $300,000 estate there would have a probate fee of $2,100.
Who Pays Probate Fees?
This is a simple question with a very important answer: who pays probate fees? The fees are paid directly from the estate’s bank account. They are not paid by the executor or the family members personally.
This means the amount of money left for your loved ones is smaller. The executor has to make sure all bills and fees are paid, which is why proper bookkeeping for the estate is so important.
How to Avoid Probate Fees (or Reduce Them)
The best way to handle probate is to plan for it ahead of time. There are several good ways to avoid probate fees on some of your assets. This helps make sure more of your money goes to your family.
This is where professional tax and estate planning is a huge help. Some smart strategies include:
For business owners, how your company is structured also plays a big role in how assets are handled and can be a key part of advanced planning.
Do All Estates Go Through Probate?
A common question we hear is, “Do all estates go through probate?” The answer is no. If an estate is very small, it might not need to. Each province has its own definition of “small.”
Also, if someone planned very well and all their main assets pass outside the will, there may be no need for probate. For example, if everything is jointly owned or has a named beneficiary. The experts at Phoenix Knight can help you figure out the best plan for your own situation.
The Key Takeaway on Probate Fees
So, what are probate fees? They are a government fee for checking a will, and the amount is based on the value of the estate. While you can’t always avoid them completely, you can lower them with smart planning.
Leaving a clear, organized plan for your family is one of the kindest things you can do. It reduces stress and saves money.
If you want to create a plan that protects your money and lowers taxes, our team is here to help. Contact us today for a clear path forward.
Written by Robin DeRidder
Robin DeRidder is the founder of Phoenix Knight Financial Solutions Ltd. With over 20 years of experience, he helps Canadian businesses and individuals with their finances. He is an expert in creating custom tax and accounting plans.
