Manitoba Eliminates Probate Fees: Considerations For Future Planning

• Published date: 18 December 2020
• Subject Matter: Family and Matrimonial, Divorce, Wills/ Intestacy/ Estate Planning
• Law Firm: MLT Aikins LLP
• Author: Mr Harmanjit Mavi

Elimination of Probate Fees in Manitoba

Probate fees were eliminated in Manitoba as of November 6, 2020. Accordingly, requests for probate, administration, or resealing in Manitoba no longer require payment of a probate fee (previously, $70 for the first $10,000 of an estate, and $7 for every additional $1,000 or fraction thereof). The applicable legislation, now renamed The Court Services Fees Act (Manitoba), still maintains that the Court may charge a processing fee for such requests; however, the fee would need to be prescribed by regulation and is expected to be nominal.

Pitfalls of Probate Planning

Probate planning has been a common element of estate planning, in which the ownership of assets is structured to reduce or avoid probate fee exposure. However, improper planning (notably through joint ownership and beneficiary designations) can lead to a gap (not bridged by any clear terms of trust) between the recipient of an asset and the asset's intended beneficiaries. Accordingly, in an effort to save on probate fees, families have occasionally stumbled into years of costly litigation.

Joint Ownership

Since the decision in Pecore v. Pecore, 2007 SCC 17, the law has been clear that there is a presumption of a resulting trust when a parent gratuitously transfers ownership of an asset into joint ownership with an adult independent child; however, the presumption can be rebutted if the child transferee can prove that a gift was intended.

Notwithstanding the decision in Pecore, it is still relatively common for an older parent to hold one or more bank accounts jointly with an adult child in an effort to avoid probate fees. The intent of the parent in establishing this joint ownership continues to be litigated because the transferee child may be reluctant to part with an asset of which he or she is the nominal owner (see, for example, Taran v. Ellison Estate, 2019 MBQB 154, and Sawchuk Estate v. Evans et al., 2012 MBQB 82).

Transfer of real property by a parent into joint ownership with an adult child has also occasionally resulted in harsh unintended consequences for the transferor parent. For example,

• the parent may be unable to undo a gift of joint tenancy to the child once it has been duly made (see for example, Boda Estate v. Boda, 2014 BCCA 354) and
• the child's interest in the real property may become subject to a claim by his or her creditors even while the transferor parent is alive and even though the transferee child contributed no value to the...