Protecting Your Assets from the Costly Burden of Probate—And Some Unexpected Strategies
Let's face it: dealing with probate fees and expenses can feel overwhelming and often unnecessarily expensive. But here’s where it gets interesting—a simple idea like holding gold bars might just help you sidestep many of those costs altogether. Sound surprising? Keep reading.
Back in the fall, I dedicated a series of eight articles to explore various methods to avoid probate altogether. This series was sparked by a challenge from a reader who accused lawyers of being 'estate chasers'—only interested in profiting from probate disputes. He dared me to explain how you could structure your estate to prevent probate from becoming a necessity.
Recently, I also gave a talk on this very topic to members of the Society for Learning in Retirement, an inspiring organization run primarily by volunteers. They organize educational programs on everything from historical topics like "The Acadians: From Nova Scotia to Louisiana" to health issues such as "Understanding Stroke: Prevention and the Role of a Healthy Lifestyle," and even modern tech skills like "AI Literacy for Everyday Life."
Most classes are filling up quickly thanks to a modest annual membership fee of $25 and minimal costs for attending the sessions, which speaks volumes about their popularity.
While answering questions from the audience, I realized there’s another often overlooked yet powerful way to bypass probate: assets that aren’t registered with official agencies or institutions. One prime example? Gold bars.
A delightful audience member shared her story—she bought gold back in 1968. Today, the value of gold has skyrocketed from just $43.50 USD per ounce in 1968 to more than $4,600 USD per ounce today. Naturally, that gleam in her eye was partly driven by her appreciation for her investment’s growth.
So, how do assets like gold bars and other unregistered holdings influence the probate process? Let's break it down.
First, a quick refresher on what probate really means. In simple terms, probate is the official court process that grants someone the legal authority—usually called an estate grant—to manage and distribute a person’s estate after they pass away.
This estate grant is essential for accessing or transferring assets that are registered or held with third-party institutions—think banks, land registries, insurance companies, or investment firms. I refer to these as "registered assets."
My previous articles focused on strategies such as spending your assets during your lifetime, gifting assets to loved ones, or setting up arrangements like joint tenancy, trusts, and beneficiary designations (for accounts like TFSAs, RRIFs, or segregated funds). These approaches allow the assets to pass directly to beneficiaries without needing probate. So, 'if' all your registered assets avoid the probate process, you sidestep the fees and legal costs involved in obtaining an estate grant.
Now, here’s the key point: it doesn't matter how vast your unregistered assets are—whether it's gold stored under your bed, cryptocurrency, expensive jewelry, or a fleet of electric bikes. Even if you’ve accumulated $5 million worth of gold bars in your home, you won’t need probate for those assets as long as they aren’t registered or tied to a third-party institution.
But—and here’s the caveat—what happens if you buy something that’s only in your name and it’s registered, like a vehicle? Imagine you purchase a $50,000 car but fail to register it jointly with your spouse. Should something happen to you, your spouse (probably your executor) will need a court-approved estate grant to transfer ownership of that vehicle.
Part of applying for this estate grant involves submitting a sworn statement listing all estate assets and their values. So, even though only the vehicle would technically require probate, all other assets—including gold, jewelry, furniture—must be listed and valued. Consequently, probate fees will apply to the entire estate, not just the registered assets.
Got questions? Feel free to ask. I might even write a follow-up piece exploring a clever estate planning technique: having two separate wills—one for registered assets and another for non-registered ones—to further streamline the process and minimize costs.
Remember, effective estate planning isn’t just about what you own but how you own it. Strategies like holding certain assets unregistered can have significant implications on the time, expense, and complexity of settling your estate. So, what are your thoughts? Would you consider holding assets like gold in ways that avoid probate? Or is this approach too risky in your view? Share your opinions below—debate is encouraged!
