TRUSTS, PROBATE and ALBERTA - Not Avoiding Probate
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
There are numerous purposes for the utilization of a trust by Albertans, such that we work with numerous business and high wealth Alberta clients in the design and implementation of trust instruments to effectuate those objective aims, however, the avoidance of probate tends not to be one of them. Yes, we may look to manage probate, so as to serve the client's particular needs; however, for Albertans, the outright avoidance of probate has limited value or consequence, especially when compared to the motivations for probate avoidance in other jurisdictions.
To provide some perspective, we need only look to compare Alberta to some other jurisdictions to begin to understand why other jurisdictions push for probate avoidance, including the use of trusts to facilitate probate avoidance. In Ontario, the estate administration tax on a One Million Dollar estate is $14,500.00 and on a Twenty-Five Million Dollar estate it would be $374,250.00; and in British Columbia the probate fee on a One Million Dollar estate would be $13,650.00 and on a Twenty-Five Million Dollar estate it would be $349,650.00. Meanwhile, in the United States, a Twenty-Five Million Dollar estate would result in federal estate taxes of $4,404,000.00, with the potential for further state-specific estate or inheritence taxes. As such, probate avoidance strategies in those jurisdictions can be of significant financial importance. In Alberta, however, the court-imposed estate administration fees on a One Million Dollar estate is $525.00, and on a Twenty-Five Million Dollar estate it is also only $525.00, such that there is no comparable financial motivation for Albertans [more on probate cost differences].
As for the previous time-consuming nature of probate, which resulted in processing delays that would typically last several months, if not longer, have been largely eliminated with the Alberta Court of King's Bench having implemented the Surrogate Digital Service that can enable a lawyer to complete the process in under a week, with relative ease, provided the appropriate paperwork is in place and the estate is sufficiently organized. And this in turn becomes an advantage in many respects, as the prompt attainment of a Grant of Probate will expedite other aspects of the estate's administration, given that banks and other financial institutions prefer to proceed with the benefit of court-issued Grant of Probate.
Meanwhile, the surrogate court only has jurisdiction over those assets and property that formed part of the testator's estate upon their death, such that assets and property that were legally divested into a trust prior to the death of the testator, are properly beyond the jurisdiction of the prying eyes of the court or any party that seeks to utilize the courts to gain information or access thereto. As such, to the extent that a testator wishes to transfer property or assets to avoid their revelation, scrutiny and/or challenge, the testator may look utilize a trust for purposes of legitimately sheltering those particular assets and property.
As such, with effective trust and estate planning, the three primary concerns that are the basis for probate-avoidance strategies in other jurisdictions - costs, delays and confidentiality - can be effectively avoided in Alberta, while proceeding through the probate process and realizing the advantages therefrom.
As such, when you are looking to create a trust that legally facilitates your objective goals, contact our law firm today to schedule a confidential consultation at 403-400-4092 or via email at Chris@NeufeldLegal.com.
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