Did you know that probate in Alberta can cost your loved ones hundreds of dollars in probate fees?
While it can be helpful and even essential in some cases, probate can also bring challenges such as unnecessary costs, prolonged settlement periods, and reduced privacy.
In this article, we’ll explore strategies for avoiding probate in Alberta and decreasing probate fees, including things like naming beneficiaries, joint ownership, trust planning, and more.
What is probate and why might you want to avoid it?
Understanding probate in Alberta
Probate validates your will in court and grants your executor the official authority to act on your behalf.
If you passed away without a will or without an appointed executor, someone would need to apply to the probate court to become your estate administrator.
While necessary in certain cases, probate also has drawbacks, including:
- Time delays: Probate can take months or years, delaying asset distribution.
- Costs: Probate fees in Alberta depend on estate size, which could deplete your assets.
- Lack of privacy: Probate makes wills public, exposing sensitive financial information.
How much does probate cost in Alberta?
Alberta is the only province in Canada with a maximum cap on probate fees.
Probate fees in Alberta can vary because fees are based on the value of your estate.
Fees are valid as of January 2025, accessed from the Government of Alberta.
Is probate mandatory in Alberta?
No, probate isn’t mandatory for every estate. However, Alberta probate rules state that it is required for all estates without wills.
Small estates, that do not have any solely owned real estate, can often avoid probate.
Estates that have assets with joint owners or named beneficiaries can avoid or reduce probate fees in Alberta, even if probate is necessary.
What assets are subject to probate in Alberta?
Any asset you own by yourself is considered part of your estate and subject to probate.
Assets that are not subject to probate include:
- Assets with joint ownership with rights to survivorship, like shared bank accounts
- Assets in living trusts, which are created while you’re alive
- Assets with designated beneficiaries, like RESPs, TFSAs, and life insurance
How long does probate take in Alberta?
Processing a probate application can take anywhere from a few weeks to a few months, depending on a few factors.
Accuracy of information
A probate application can be rejected if it is inaccurate or completed incorrectly. If rejected, the application must be fixed and resubmitted, adding time to the process.
Complexity of estate
Simple and small estates are often faster to process. Complex estates may add additional processing time to the application.
Out-of-province or complex business assets take longer to evaluate, delaying probate.
Location within Alberta
The capacity of your probate court plays a role as well.
Applications submitted to a local court for Calgary, compared to one for Camrose, may take longer to process because of the volume of applications and worker capacity.
Strategies to avoid probate in Alberta
Using multiple different strategies increases your chances of avoiding probate or reducing probate fees.
Make a will
Probate is required for all estates without wills.
By making a will, you can take the first step towards avoiding probate and protecting your loved ones, assets, and peace of mind.
Note: Having a will doesn’t automatically avoid probate, but it may decrease the likelihood of probate compared to intestate estates, where probate is always required.
Name beneficiaries for your assets
Some assets have what’s called designated beneficiaries.
These are people who will automatically inherit the respective asset if you pass away. The assets will transfer directly to them, bypassing your estate, probate, and probate fees.
This includes RESPs, RRSPs, TFSAs, pension plans, and life insurance policies.
You can keep track of all your assets with an asset list, which comes with all Willful Premium Coverage plans!
Joint ownership in Alberta
Joint ownership of assets with the right to survivorship can help ensure that your assets avoid probate and pass directly to surviving owners if you pass away.
If you’re considering shared ownership of real estate, like a house, it’s important to understand the difference between joint tenancy and tenancy in common.
- Joint Tenancy: Ownership passes to the co-owner upon death, avoiding probate.
- Tenancy in Common: Ownership remains part of the deceased’s estate and may require probate.
Setting up a trust
When you make a living trust, you create a separate legal entity from yourself to hold your assets.
This means the assets you place within the trust are no longer part of your estate.
If you specified in your trust document that assets should be immediately distributed when you pass away, those assets would go directly to your trust beneficiaries, not through probate.
Creating a trust also helps you decrease the size of your estate, further reducing the likelihood of probate and the probate fees if required.
How a Trust Works:
- Assets are transferred into the trust while you’re alive.
- The trustee manages and distributes the assets based on your instructions.
Gifting assets to make your estate smaller
Your estate is made up of everything you solely own at the time of your death.
Whether probate is necessary, and how much it might cost, depends on the value of your estate.
Anything you give away before your death is not considered part of your estate. Distributing assets as gifts during your lifetime can reduce the size of your estate and simplify its probate application if probate becomes necessary. This is called early inheritance, also known as living inheritance, and allows you to see the impact of your gifts.
Learn more about specific gifts for inheritance →
Are there tax implications for giving early inheritance?
Depending on the type of gift, large gifts may trigger tax events for you or your gift recipients.
For example, gifting secondary property could trigger capital gains taxes.
Do I need to update my will after giving a gift?
If the gift was previously listed in your will, you should update your will so it’s as accurate as possible to the assets you currently own.
If you made your will with Willful, you can easily update it for free. Just log back in, click the Will section, and make your edits.
Any time your will is updated, it must be re-executed to be legal again. That means signing it again in front of two valid witnesses.
Do I need to keep records of what I’ve given away?
For tax considerations, high-value gifts may need formal agreements or additional documentation.
But you’re not required to keep formal records of what gifts you give and who you give them to.
What’s considered a small estate in Alberta?
A small estate is one with a limited number of assets or complexity.
This is often seen as an estate without any solely owned real estate, large business assets, or international assets.
For example, if you co-own your house, car, and investments with your spouse, your estate becomes smaller.
If you add your spouse as a designated beneficiary on investment assets, pensions, and insurance policies, your estate becomes even smaller.
The more probate avoidance strategies you employ while estate planning, the smaller your estate becomes and the less likely it is to go through probate in Alberta.
Common mistakes to avoid when planning for probate
Even with careful planning, sometimes things get missed.
Here are the top three mistakes to avoid while you’re planning around probate in Alberta:
- Make sure your will and beneficiary designations are always up-to-date
- If you want your co-owner to inherit real estate automatically, make sure you have a joint tenancy, not tenancy in common
- If you make a new will, make sure to destroy your previous one so it doesn’t cause confusion in the future
“Keep track of the original will!” advises Madeleine E. Coats, a Canadian wills and estates lawyer.
Even if you make copies of your will, always make sure to protect the original signed document.
Decrease your chance of probate with a will
When you make a legal will, you take the first and most important step to help protect your estate from probate.
Willful helps hundreds of thousands of Canadians create their legal wills and other Alberta estate planning documents.
Today, you can make yours too.
