When an executor of a will applies to probate (in other words prove) the will in British Columbia, he or she must pay probate fees before the court will grant probate. Similarly, a person applying to court to be appointed an administrator of an estate (where there is no will or no executor willing and able to act) is required to pay probate fees before the court will grant letters of administration. Probate fees are paid pursuant to, not improbably, the Probate Fee Act, SBC 1999, c. 4. For simplicity, I will refer only to applications for probate, but the same fees apply to applications for letters of administration.
The amount of probate fees is based on the value of the estate assets. There is an initial filing fee of $208. After the application for probate is filed, but before the court registry will release the grant of probate, the executor is required to pay $6 for every $1,000 or part of $1,000 by which the value of the estate exceeds $25,000 up to $50,000, plus $14 for every $1000 or part of $1000 by which the value of the estate exceeds $50,000. Accordingly, for most estates probate fees are a tax approaching 1.4 percent of the value of the estate.
The executor is entitled to take the probate fees out of the estate, if he or she has access to estate funds, or the executor may be reimbursed later from the estate. Raising the money required for probate can be difficult in large estates, with high probate fees.
The Probate Fee Act provides that the executor must pay fees on all real property and tangible personal property of the deceased situated in British Columbia that passes to the executor on death. The Act also provides that “if the deceased was ordinarily resident in British Columbia immediately before the date of death,” the executor must also pay probate fees on “the intangible personal property of the deceased, wherever situated.”
In other words, the executor is not required to pay probate fees on the value of any of the deceased’s land or tangible personal property (things you can touch) situated outside of British Columbia. However, if the deceased was ordinarily resident in British Columbia, the legislation requires the executor to pay probate fees in respect of intangible property such as financial assets even if under common law rules these assets are situated in another province or country. (The Provincial Legislature may have exceeded its constitutional authority in requiring that probate fees be paid in respect of intangible property outside of British Columbia. See Mr. Justice Ehrcke’s analysis in Re: The Estate of Bessie Bloom, 2004 BCSC 70, at paragraphs 31-34.)
The fees are calculated on “the assets and liabilities of the deceased, irrespective of their nature, location or value, which pass to the deceased's personal representative,” all of which the executor must disclose on the disclosure document filed with the application for probate.
Accordingly, the executor does not need to disclose those assets that do not pass to the executor, but pass to beneficiaries outside of the estate; those assets are not considered for the purpose of calculating probate fees. For example, if the deceased had designated a beneficiary of a life insurance policy, the insurance proceeds may pass to the beneficiary outside of the estate, and probate fees are not payable in respect of the insurance proceeds.
However, the disclosure requirements are not limited to those assets registered in the deceased’s name. If another person holds title to an asset in trust for the deceased, and if the deceased’s beneficial interest in the asset passes to the executor, the executor is in my view required to include it in the disclosure document.
In the case of joint bank accounts, if the surviving joint account holder is entitled to keep the proceeds of the account for his or her own benefit, then the account does not need to be included in the disclosure document, and the executor should not pay probate fees in respect of the joint account. On the other hand, if the surviving joint account holder is really holding the proceeds of the joint account in trust for the estate, then the account should be listed as an estate asset, and is subject to probate fees. (See my earlier post “Joint Accounts with Right of Survivorship”).
An executor is only required to pay probate fees if he or she applies for a grant of probate. If the executor is able to administer the estate without applying for probate--and chooses not to apply for probate--he or she does not have to pay probate fees.
Distributing the “stuff”
2 days ago