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Avoiding Probate in Canada: Legal Tactics That Work (and Ones That Don’t)

Avoiding Probate in Canada Legal Tactics That Work (and Ones That Don’t)

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Probate–the court process that validates a will and gives your executor authority–can be time-consuming, public, and expensive. With fees in provinces like Ontario topping 1.5% on estate values over $50,000, many Canadians look for strategies to sidestep it.
At Forum Estates LLP, we understand that your estate plan must be both legally sound and customized to your family’s real needs. Let’s review tools that succeed…and those that carry hidden risks.

What Works

  • 1. Beneficiary Designations on Registered Accounts
Naming beneficiaries on RRSPs, RRIFs, TFSAs, pension plans, and life insurance is perhaps the simplest way to bypass probate. These assets transfer directly at death, cutting delays, costs, and keeping things private.
  • 2. Joint Ownership with Right of Survivorship
Holding property jointly (e.g., real estate or bank accounts) allows seamless title transfer on death. The deceased’s share doesn’t enter your estate…and surrenders any portion of probate fees. However, be cautious: this can trigger immediate attribution, loss of control, or unintended gift to the co-owner–especially if that person is your child.
  • 3. Living (Inter Vivos) Trusts
Revocable living trusts are established during your lifetime. If assets (like property or investments) are properly titled in the trust, they bypass probate completely. This solution is powerful. It must be well-funded during life to avoid probate traps.
  • 4. Alter Ego and Joint Partner Trusts
These taxeffective trusts are available to individuals aged 65+ and let you transfer assets into trust while retaining control. Since the assets are owned by the trust, not your estate, they avoid probate. They also offer privacy and seamless distribution.
  • 5. Lifetime Gifts

Gifting assets to family during life removes such assets from your estate, reducing probate exposure. Use tools like the $750,000 lifetime capital gains exemption for business shares or farm assets, and careful planning to manage attribution rules.

What Often Doesn’t Work or Comes with Hidden Costs

  • A. Joint Ownership as a Blanket Solution
It may look easy, but adding a child or other co-owner can trigger immediate “disposition” for tax purposes, risk creditor exposure, and give your coowner unintended control . Moreover, the probate fee saved, say, 1.5% in Ontario, is often small compared to potential problems.
  • B. Relying Solely on a Will
Even a well-drafted will requires probate in most cases. Absent other planning tools, assets must go through the courts–delaying access, increasing costs, and becoming public record.
  • C. Assuming No Federal “Estate Tax”
It’s true Canada eliminated federal estate/gift taxes decades ago . But deemed disposition at death causes your estate to recognize capital gains on most properties (unless rolled to a spouse). These taxes don’t go away…they just get triggered differently.

“Don’t let the Probate Saving tail wag the Estate Planning Dog” 

You can’t take it with you…, Sandra E. Foster 

Key Legal References & Recent Updates

  • Probate Fee Structures (Estate Administration Tax)
  • In Ontario: 1.5% on estate value exceeding $50,000
  • Alberta capped at $525. Quebec avoids probate entirely with notarial wills.
  • Income Tax Act – Section 70 (Deemed Disposition Rules)
  • Upon death, CRA treats capital property as sold at fair market value. Gains taxed on terminal return.
  • Spousal rollovers and designated dependent provisions can defer or eliminate this tax.
  • Trust Vehicles under ITA
  • Alter Ego Trusts: Sec 104 (ITA); for Canadians 65 +; avoids probate.
  • Joint Partner Trusts: similar benefits for couples
  • Attribution Rules
  • Income earned by a trust may be attributed back to the settlor when beneficiaries are spouse/minor children.

Statistics & Facts

  • “1 in 2 Canadians don’t have a will.” Without one, estates default to probate and intestacy rules--even for common-law partners.
  • Ontario’s probate fee: 1.5% on estate value above $50,000; fees begin at $0 for smaller estates .
  • Alberta’s probate fee cap: $525; Manitoba: no probate fees since 2020.
  • “Living trusts are one of the best ways to avoid estate taxes.” (SWPP guide, 2025)

Comparing Common ProbateAvoidance Tools

Strategy 

Pros 

Cons 

Beneficiary Designations 

Simple, direct, avoids probate 

Doesn’t affect other assets; needs regular maintenance 

Joint Ownership 

Easy to implement, bypasses probate 

Tax consequences, loss of control, unintended gifting risks 

Living Trust 

Full control, privacy, avoids probate 

Complex setup, need diligent funding, professional costs 

Alter Ego / Joint Partner Trust 

Probate avoidance, continued control, privacy 

Only for those 65+, trust costs, tax complexities 

Lifetime Gifts 

Reduce probate base, tax planning opportunities 

Attribution rules, gift taxes, must plan well in advance 

Best Practices from Forum Estates LLP

To build an effective, robust plan:
  • Start with a proper will: avoid intestacy and clarify your executor.
  • Ensure beneficiary designations are current: check RRSPs, TFSAs, insurance.
  • Consider trusts if your estate is sizable or complex: especially alter-ego for seniors.
  • Use joint ownership judiciously, only with counsel on implications.
  • Utilize lifetime capital gains exemptions and consider gift planning if business assets are involved.
  • Integrate probate avoidance into your overall tax & estate strategy: recognized by CRA and courts.

Final Word

Probate avoidance in Canada isn’t about sidestepping legal duty…it’s about crafting a thoughtful, modern estate plan that:
  • Saves families from unnecessary cost and delay.
  • Keeps sensitive affairs private.
  • Aligns with current law and tax policy.
  • Reflects your real-life needs, assets, and loved ones.

At Forum Estates LLP, we specialize in designing estate and trust solutions that respect current rules from CRA, provincial courts, and the Income Tax Act. Whether it’s drafting alter ego trusts, updating wills, or managing beneficiary designations, we customize each plan to ensure your intentions are honored–efficiently and effectively.

Curious about how these tactics apply to your situation? Contact us for a personalized consultation.
Disclaimer: This article is for informational purposes only. Consult a qualified legal and tax professional before implementing any estate plan.