Planning for Probate Fees

Let’s explore what probate fees are, how they are calculated in Nova Scotia, and how to manage them from a financial planning perspective.

What Are Probate Fees?

Probate fees, also known as estate administration taxes, are a provincial tax imposed on the value of an estate when it passes through the process of probate. Probate is the legal process of validating a will and settling an individual's financial affairs after their death. The primary purpose of probate fees is to help cover the cost of administering estates and maintaining the provincial legal system. They are paid from the estate’s assets and are paid to the Minister of Finance of Nova Scotia.

The calculation of probate fees differs based on your province of residency. In Nova Scotia they are calculated as follows:

Calculating Probate Fees in Nova Scotia

Estates not exceeding $10,000                        -         $85.60

Estates exceeding $10,000 to $25,000          -         $215.20

Estates exceeding   $25,000 to $50,000       -          $358.15

Estates exceeding $50,000 to $100,000         -      $1,002.65

Estates exceeding $100,000   -     $1,002.65 + $16.95 for every $1,000 over $100,000

Financial Planning Considerations:

1. Designate beneficiaries/successor annuitants on registered accounts so they bypass probate. It’s important to understand other taxes may still be applicable, this will only avoid probate fees.

2. Joint Ownership: Where applicable, holding assets jointly with a spouse can bypass probate fees as they will automatically transfer to the surviving joint owner. However, it's crucial to understand the potential implications of this strategy. People often add other family members as owners without appreciating they now have claim to the asset, and so do their spouses in the event of marriage breakdown, or creditors in the event of bankruptcy.

3. Document Organization: Properly organize and maintain all financial and legal documents. This will make the probate process smoother and may help identify any potential issues that could increase fees.

4. Work with a financial planner to explore if other strategies such as trusts or gifting assets are right for you.

As you can tell, planning for probate can be a complex matter. Often, it’s better to pay the fees than to create larger issues trying to avoid them. It’s important to work with a financial planner to ensure your unique situation is reflected in your estate plan.