British Columbia’s Probate Fee Act sets out the rules for the rate of probate fees payable on a deceased estate and when they must be paid. As a general rule, probate fees are equal to approximately 1.4% of the gross value of a deceased’s estate, calculated as of the date of death, and must be paid before the Court will issue a Grant of Probate. There are some circumstances, however, which reduce the amount of probate fees payable.
The calculation of probate fees payable requires consideration of the following four issues:
1. Whether the Will needs to be probated;
2. Which assets pass to the deceased’s personal representative;
3. Whether the deceased was ordinarily resident in British Columbia; and
4. Whether the total value of the estate is greater than $25,000.
The first issue, whether the Will needs to be probated, is really dependent upon the specific circumstances of the deceased and what assets he/she owned. Certain entities, such as the Land Title Office and financial institutions, can refuse to transfer assets to the beneficiaries of the Will without a Grant of Probate. If the estate contains any such assets, then probate will be necessary. There are other circumstances that would also require probate, but the main thing to note is that probate is not always required.
If the Will is going to be probated, then the next thing to determine is the value of the estate. Probate fees are calculated based on the “value of the estate” which has a specific definition in the Probate Fee Act. This definition relates to the second and third issues, noted above.
The “value of the estate” only includes assets that pass to the deceased’s personal representative. This means that all assets that pass directly to someone else are not included in calculating the value of the estate. For example, property owned by two people as joint tenants with right of survivorship passes automatically to the surviving owner and does not pass to the deceased’s personal representative. Likewise, RRSPs or life insurance policies that name a designated beneficiary automatically pass to that named beneficiary.
Of the assets that pass to the deceased’s personal representative, the “value of the estate” is comprised of the following:
• real estate and tangible personal property that is located in British Columbia (tangible personal property means personal items that you can feel and touch); and
• intangible personal property that is located anywhere in the world, if the deceased was ordinarily resident in British Columbia (intangible personal property means items that you can’t feel and touch, such as investment accounts, stocks and bonds, etc.).
Because intangible personal property is only included in the value of the estate if the deceased was ordinarily resident in British Columbia, there are times when such assets are excluded from the probate fee calculation. There is no black and white definition of what constitutes “ordinarily resident” but in general it means “the place where in the settled routine of your life you regularly, normally or customarily live.” It is possible to be ordinarily resident in more than one jurisdiction at the same time.
The fourth issue is whether the total value of the estate exceeds $25,000. If it does not, then no probate fees are payable. For estates exceeding $25,000, probate fees are payable at the rate of $6 for every $1,000 (or part of $1,000) of the value of the estate that is between $25,000 and $50,000, and $14 for every $1,000 (or part of $1,000) by which the value of the estate exceeds $50,000.
The calculation of probate fees involves a consideration of several different factors. The assets owned by the deceased, how they were owned, where the deceased customarily lived and the values of the assets all play a role in determining the amount payable.
Melodie Lind can be reached at (250)869-1210 or at [email protected]
