Page 171 - A Canuck's Guide to Financial Literacy 2020

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Reducing Probate Fees

Many people hate paying probate fees but with proper planning, they can eliminate or lower
the fees by lowering the value of the estate by

▪ Naming Beneficiaries on Registered Investments such
as RRSPs, TFSA, RRIFs, SRSP, LIF, LIRA
▪ By naming a beneficiary on your registered investment, you’ll be able to avoid
probate fees as upon your death, the funds would be transferred to your spouse
or a qualified beneficiary.
▪ Naming Beneficiaries on Insurance Policies and Segregated Fund Policies
▪ By naming a beneficiary on your life insurance policy, the death benefit would
be paid directly to the beneficiary, thus by-passing the estate and probate.
▪ Registering Property in Joint Ownership
▪ Property registered in joint would pass to the spouse upon the other’s death.
This could include real estate, bank accounts, joint ventures, etc.
▪ Excluding assets into the estate by using trusts
▪ One can avoid probate by transferring property into a living trust, also known as
an inter-vivos trust. The property transferred into the trust belongs to the trust
for the benefit of the beneficiaries. Once the trustee passes away, the
successor trustee would be able to manage the assets.
▪ Gifting property, assets and investments
▪ You can gift assets or property so it belongs to someone else. Doing so will
exclude the asset from your estate and not be subject to probate.
▪ Estate Freeze
▪ One may freeze the value of their estate by limiting the growth of capital assets
such as real estate, securities, corporate interests etc. Doing so, you would be
transferring any future growth of the assets to another party, usually your family
members.