The short answer is: Yes. But with some caveats.
A loss in the family is one of the hardest moments to bear. The grief comes in waves, overwhelming at times, and while healing may come in time, there is a lot to do in the days and weeks ahead.
Often, one of the primary tasks for the Estate Trustee is to sell the family home. An estate sale is not your usual real estate transaction, however. In addition to dealing with friends and family members who are also grieving, there are also legal and financial matters to navigate.
Here’s everything you need to know about navigating probate in Ontario.
Firstly, What Is Probate?
To fully understand how it works, it helps to go back and review what happens from a legal perspective. Ideally, the deceased has left a clear and uncontested Will with specific instructions on how they want their assets distributed.
The Estate Trustee (formerly known as the Executor) is the person chosen in advance to oversee everything from notifying beneficiaries and paying off outstanding debts to liquidating assets and settling the estate.
Before the Estate Trustee can begin their role, the courts must first verify that they are legitimate and capable. This process is referred to as probate. If the Will does not name an Estate Trustee, probate is required to grant the authority.
Learn more about selling a home with legal complexities with these posts next:
- How to Handle an Estate Sale in a Challenging Real Estate Market
- Understanding the Legal Fees For Selling a House in Ontario
- Who Gets the House in a Divorce in Ontario?
What Does Subject to Probate Mean?
“Subject to Probate” refers to any asset that must go through the formal probate process with the courts. Typically, assets subject to probate include real estate, bank accounts, investments, vehicles or even belongings of significant value.
How Does Probate Work in Real Estate?
In real estate, probate is when the courts officially give the Estate Trustee the power to sell the property or transfer it.
Once the Estate Trustee has official documentation, known as a Grant of Probate, they are officially allowed to sell the house. Grant of Probate is required at every stage of the sale. Financial institutions, land registry offices and even some keen buyers will want to see this proof before moving forward.
In addition to validating the will, Grant of Probate also offers some protection to the Estate Trustee by officially recognizing their role and right to manage the estate.
Once the property is sold, the Estate Trustee is tasked with paying any debts, mortgages or taxes left over from the deceased after which point the proceeds will get distributed to the beneficiaries designated in the will.
For more situation-specific selling advice, read our post: Selling A House to A Family Member in Canada
When is Probate Not Required?
Depending on the province you live in, there may be different laws governing the bypass of probate. In Ontario, there are several conditions or types of assets that would skip probate, including:
- Jointly Owned Property – If a property is jointly owned, the surviving spouse or owner would automatically have ownership transferred to them. (This does not include tenants in common)
- Accounts with Named Beneficiaries – If a financial asset has a designated beneficiary, the funds pass directly to them without going through probate. This includes assets such as life insurance policies, pensions and registered accounts such as TFSAs, RRSPs and RRIFs.
- Small Balances – If the deceased has a relatively low bank account balance, the banks may agree to waive probate. Note: banks set their own threshold for this so it could differ between them.
Probate Grey Areas
As with most legal proceedings, some aspects of probate are a bit nuanced. An Estate Trustee may run into these grey areas where probate may not be technically required, but instead something else needs to happen. For example:
- Small Estate Certificate – In Ontario, there is a law that states if an estate is worth $150,000 or less, it is eligible for a different process known as Probate of a Small Estate. This is much faster and more streamlined than probate for large estates.
- Dual Wills – It’s common for high-net-worth individuals or business owners to have a primary and secondary Will. In most cases, the primary Will is subject to probate while the secondary Will (usually used for private assets and personal items) is not subject to probate.
This is where having an excellent real estate lawyer is helpful.
So, Can You Sell a Home Without Probate?
From start to finish, the process of probate can take anywhere from six months to almost two years, depending on the complexity of the estate and timelines for court proceedings. In some cases, an Estate Trustee may wish to sell the property of the deceased before probate is fully granted. Maybe they want to avoid carrying costs, or minimize the risk of having a vacant home. Either way, it is possible to sell a home before probate with the First Dealings Exemption.
The First Dealings Exemption applies to properties that were originally registered under Ontario’s old “Registry Act” system before getting converted to the new “Land Titles” system. The deceased must have owned the property for the entire time before and after the conversion, and it must be the very first sale or transfer taking place since the conversion.
After probate, the process of selling is much the same. Listing strategies, marketing, pricing and negotiating all still apply. Learn more about the process of selling a house with these posts next:
- The Key to Successful Showings When Selling Your House
- Challenges of Selling Your Home and How to Overcome Them
- What Taxes Do You Pay When Selling a House in Ontario?
What if the Home is Not Exempt?
If the property does not meet any of the situations mentioned above that allow for bypassing probate, you can still take steps to get the home sold once the Grant of Probate is received, such as:
- Clean, declutter, repair and maintain the home
- Hire a real estate agent and list the home for sale
- Conduct showings and negotiate with interested buyers
All of these are allowed without a Grant of Probate; however, to close on the sale, the Land Registry Office will require it. If you’re planning on selling without probate, it’s important to be upfront with your agent and buyers and include a probate clause in the purchase agreement conditional on receiving a Grant of Probate.
Selling on behalf of a deceased loved one can be emotionally trying. Our top agents in Hamilton and Burlington can help you navigate the real estate side of probate. Get in touch with any questions, or call 905-332-9223 to connect with our office.
