Have you had to settle an estate lately? If you have, you may know that it can be an exercise in frustration. More recently, banks and credit unions are asking for probate on smaller and smaller amounts. A recent, immediate, family story was a request to probate a bank account with only $23,000 in it. Their threshold is apparently $20,000; however, it is within their discretion to request a probated will on any amount below that. In this family’s situation, all other assets passed directly to the named beneficiaries on various investments accounts, such as TFSA and RRIF. Not only is there now an undue delay of months, depending on whether you do a simplified method or not, the average cost can range between $2000-$3500. That’s an awful lot on $23,000!
On the upside, there is a way to keep your estate efficient, private, and less costly for settlement: have some or all of your non-registered/taxable/open investments with a life insurance company. While still offering an investment portfolio of both growth and security, their products allow you to name a beneficiary, bypassing any need for probate. Any inheritance remains completely private, unlike a will, which is public, and your money can be distributed in weeks versus months or longer. Potential costs associated with these investments are increasingly unfounded, as companies have introduced low-cost versions, to attract estate planning money, knowing this has been a long-standing objection.
If your financial advisor is not talking to you about this, we would love to!