Probate vs. Letter of Administration: What’s the Difference?

When someone dies in British Columbia, loved ones can be left wondering how they will receive their inheritances, and how to begin the process of administering the estate. When a will is left behind, the courts must first have proof that the will is, in fact, a valid will. In cases where the deceased did not write a will, the courts are tasked with determining how the estate should be fairly distributed, and finding someone who can act as the administrator of the estate. Ultimately, it can become confusing and stressful for those involved with handling a loved one’s estate. In this blog we’ll help to clarify the difference between when a will is required to be granted probate, and when a letter of administration must be attained.

Probate

Probating a will is the process that ensures a will is real, was left by the deceased, and the executor named in the will has the authority to deal with the estate of the deceased person. Probate can be a lengthy process as the executor must get a grant of probate which is an application made to the court. The grant of probate is given to the executor when they can prove that they have legally appointed authority over the estate. The purpose of probating a will is to guarantee that large assets are not improperly handled after the owner passes away.

Most of the time, when the will-writer doesn’t own land, a large bank account, or a large investment account, a grant of probate is not required as the assets which make up their estate do not meet the minimum value required. As a general rule of thumb in British Columbia, if the total value of the estate named in a will is less than $25,000, the will won’t need to go through probate; however, there can be exceptions to this rule. The most common of which being instances where there are joint tenancy agreements over the assets in question. If the testator is in a joint tenancy agreement with someone, such as their spouse, the spouse will have full ownership of the asset upon the testator’s passing. This is also the case for any assets that have a designated beneficiary assigned to them; the beneficiary will gain authority of the asset upon the testator’s death. Excluding any joint tenancy assets and assets with designated beneficiaries, if the value of the estate is above $25,000, the will must be granted probate.

Letter of Administration

When someone dies without leaving a valid will, the courts determine how the person’s estate should be distributed. Since there is no will in such cases, it does not make sense to apply for probate as there is no valid will to test. Interested parties are able to apply for a letter of administration to be granted executor-like duties as the estate administrator. The order of priority when multiple people apply for a letter of administration is discussed in our estate blog on dying intestate – who becomes the executor (or administrator).

In some cases, a person leaves a valid will; however, it does not account for all of their assets. When this happens, the will can be granted probate and a letter of administration must also be awarded in order to properly distribute the assets not named in the will. As an example, an elderly man names all of his assets in his will except for his savings account with $100,000 in it. A letter of administration must be granted for someone to distribute the savings account while the valid will would need a grant of probate to distribute the remaining assets.

Whether the estate must be granted probate or a letter of administration, the estate is expected to pay approximately 1.4% of the total estate’s value plus a $200 court filing fee. If the estate assets are valued under $25,000, these fees will be waived.

In general, probating a will and receiving a letter of administration are similar processes, but have different purposes and applications in different circumstances. If someone dies fully or partially intestate, a letter of administration will be required in order to distribute the assets. If a properly valid will is left, a grant of probate is typically required and no letter of administration needs to be received by anyone.

If you’re unsure whether you need to receive a grant of probate or a letter of administration, contact an experienced estate lawyer today. We can help guide you through the probate process or through the process of receiving a letter of administration.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.