If you have been following my blogs on this topic, you will, by now, be wondering if it should have been titled ‘How Not to Avoid Probating a Will’. Admittedly, that might be a better title.
Although I rarely recommend that a parent try to avoid probate between generations because of the many problems that I have outlined in previous blogs, there may be situations where it is a good idea. One example is if a parent is alone (widowed, divorced or never married), is diagnosed with a terminal illness, not expected to live long, is mentally capable and has one adult child who will be the sole beneficiary of the parent’s estate. In such circumstances, it may be appropriate to arrange the parent’s affairs to avoid probate.
However, consideration must be given to whether the lack of probate will cause problems with estate administration. For example, if a cheque is issued payable to the estate, it may be difficult if not impossible to cash the cheque. In our experience, banks are reluctant to allow an Executor full control of an estate bank account or to cash cheques payable to an estate if probate has never been obtained.
There are numerous examples where cheques will only be issued payable to the estate. If the deceased is likely to receive an income tax refund after death, the cheque will be payable to the estate. If the deceased arranged a prepaid funeral and the funds on deposit with the funeral home exceed the cost of the funeral, a refund cheque will be payable to the estate. If the deceased is owed a refund from a prepaid newspaper subscription or for monthly rent in a residence, a refund cheque will be payable to the estate. If the deceased was a beneficiary of another person’s estate which has not been fully administered, the deceased’s share may be payable to the deceased’s estate.
As you can see from my blogs on the issue of ‘avoiding probate’, it can end up complicating one’s affairs (even before you die) as it is not as straightforward (or cost-effective) as some believe. The question ‘to probate or not to probate’ should be carefully reviewed with an experienced estate planning advisor who can analyze all aspects of a plan thereby allowing one to make well-informed decisions for today and beyond.
Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.
