Before we jump into the top two instances where Probate is needed, we first must define what Probate is. A Grant of Probate (or "Probate") is simply a court order that approves the appointment of the Executor named in a Will, authorizes that Executor to legally act on behalf of the deceased and confirms the Will as the last known Will and Testament of the deceased.
If the deceased did not have a Will, then the order sought is called a Grant of Administration (here in Alberta). Other jurisdictions may call it Letters of Administration or Grant of Letters of Administration. In this situation, the court will approve the appointment of (typically) a relative of the deceased and authorize that person to legally act on behalf of and deal with the estate of the deceased.
So now that we know what Probate is, we can begin with the first instance that Probate will absolutely be required and that is real estate. If the deceased owned real estate solely (in his/her name only) without a joint owner, then a Grant of Probate is required to allow the Executor to deal with that property. The Land Titles Office will not allow real property to be transmitted nor transferred without a Grant of Probate or a Grant of Administration, so there is no way to get around that requirement after the owner has died.
The second instance where Probate will absolutely be required by the Executor revolves around the Golden Rule. Banks follow very closely the Golden Rule, being: 'he who has the gold, makes the rules". If the deceased held a large amount of assets in a bank in his/her name solely (not jointly with another person) then the bank will require the Executor to obtain a Grant Probate or Administration to deal with the deceased's funds.
Each bank is different, the threshold value of funds held by the bank varies from bank to bank and sometimes branch to branch. We have seen Probate requested by a bank for an account with as little as $2,400.00 in it and another bank not request Probate for accounts less than $100,000.00.
However, over the past few years the banks began requesting a Grant of Probate for accounts which were owned jointly by an elderly parent and one or more of his/her adult children. In law, joint ownership has a special right of survivorship (meaning whoever survives the longest, owns the asset). Because of this special right, many people use joint ownership to negate the requirement of Probate. This tactic, however, is causing more problems for Executors, because some adult children keep the entire bank account as their own on the death of mom or dad and insist that the account was intended to be a gift to them. This has resulted in an increase of litigation among siblings and has clogged up our court system. The problem has gotten so bad, that in June of 2022, the laws were changed in Alberta to require all jointly held assets to be disclosed in the Applications for a Grant of Probate and Administration.
So what can be done to avoid Probate? Despite the above, there are still ways to "probate proof" an estate. Adding joint owners to real estate will negate the requirement for Probate when dealing with real estate. Adding all children or none of the children to an account may work to negate the bank from requiring Probate, but only if some form of indemnity agreement and/or release is negotiated between the bank and all of the beneficiaries. For more information on this topic and other topics, please contact our office.
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