The province of Ontario has a probate requirement. The probate requirement exists in order to ensure that a deceased individual’s assets are distributed to the appropriate parties, and to ensure that creditors and taxes are paid.
Once you understand what probate is and when it’s required, avoiding probate won’t be that hard. You just need to take the right steps. In this guide, we’ll teach you all the tips you need to remember when avoiding probate.
1) Ensure Your Assets Are in Cash Only
If your property is held or invested in a non-cash asset, such as real estate, business interests, or any other investment that is not cash, you may not be able to avoid probate.
However, you can avoid probate by making sure that all of your real estate, business interests, or any other non-cash assets have been placed in a trust.
A trust is a legal document which defines how assets are managed. Once your assets are in a trust, they are not owned by you anymore, but instead are owned by the trust.
By placing assets in a trust, you can avoid probate since the trust will no longer be considered your property. The trust will still own the assets, not you.
2) Name All Key Beneficiaries in Your Life Insurance
Many people have life insurance. If these people die, the premiums paid for their life insurance will go to their beneficiary. If a beneficiary is named in a life insurance policy, that beneficiary will receive the insurance proceeds, even if the policy was not purchased with this beneficiary in mind.
To avoid probate, you need to ensure that whoever you want to inherit your estate is named in any life insurance policy you have. If a beneficiary is not named in a life insurance policy, your estate will be open to probate.
3) Consider Joint Ownership
A joint ownership is a legal document which says that two or more individuals own a property or asset together. Since both individual own the property together, their names will appear on the title of the property.
When you own a property with somebody else, you can avoid probate. This is because your property will automatically transfer directly to your joint owner when you die.
4) Pass Properties as Gifts With Caution
Probate can also be avoided when a property is passed to a beneficiary as a gift. Make sure your will is clear about the person you would like to inherit your property.
You can also transfer your property to your beneficiary in a trust. When you transfer your property in a trust, it is not owned by you anymore, as it is owned by the trust.
5) Set Up a Trust Fund
A trust fund is a legal document which describes how property or assets are to be managed. In a trust fund, property is no longer owned by the trust’s creator, but instead is owned by the trust.
If you would like to avoid probate, you can set up a trust fund. For example, if you want your financial advisor to manage your estate after you die, you can set up a trust fund to manage your estate.
Avoiding probate can sometimes be a little complicated. However, the steps above will help you to effectively avoid probate in Ontario. The next time you want to plan your estate, remember these tips.
If you need more help planning your estate, or if you want someone to take care of everything for you, Ontario Wills can help. With our esteemed wills and estates lawyers, you will be much more prepared for avoiding probate. Get in touch with us today.