Did you know that Nova Scotia is the most expensive province in terms of probate fees, followed closely by British Columbia and Ontario?
Do the majority of your clients live in one of these provinces? If so, the Estate Costs Comparison calculator is your best ally to help you close the deal. Here's how:
Probate fees are estate administration taxes (not applicable to Quebec). Depending on the province of residence, these fees can make a significant difference to the net value of your client's investments at death.
With segregated funds, because of the beneficiary designation, other than the estate, the death benefit paid bypasses the estate and is therefore not subject to these costs.
Using the Estate Costs Comparison calculator, we have created scenarios by province based on the following assumptions:
- Capital to invest: $100,000 (non-registered)
- Projection period: 15 years
- Rate of return, net of fees:
- 5% for the mutual fund
- 4.75% for the segregated fund
- Withdrawals/deposits during the projection period: none
- Potential fees to be paid with mutual funds:
- Professional fees: five hours at $250/hr
- Estate executor's fees: 3%
- Fees applicable at death (ex. surrender fees): $0
|
Province |
Probate fees (2021) |
Net potential savings |
|
Nova Scotia |
$2,831 |
$4,988 |
|
British Columbia |
$2,560 |
$4,698 |
|
Ontario |
$2,368 |
$4,507 |
|
Saskatchewan |
$1,455 |
$3,374 |
|
Newfoundland and Labrador |
$1,301 |
$3,359 |
|
New Brunswick |
$1,039 |
$3,170 |
|
Prince Edward Island |
$832 |
$2,892 |
|
Alberta |
$400 |
$2,337 |
|
Northwest Territories |
$325 |
$2,227 |
|
Nunavut |
$300 |
$2,109 |
|
Yukon |
$140 |
$2,077 |
|
Manitoba |
$0 |
$2,025 |
|
Quebec |
$0 |
$2,131 |
The Estate Costs Comparison calculator:
- illustrates the comparison of estate costs between mutual funds and segregated funds
- demonstrates the value of including segregated funds and beneficiary designations in a thoughtful estate planning strategy
- helps to understand and highlight some of the costs and challenges associated with estate settlement in order to make informed decisions
- in no way replaces comprehensive estate planning
Best practices
- The tool is for advisor use only
- Read the disclaimer carefully and advise the client if necessary
- Prepare scenarios PRIOR to the meeting with the client to avoid any surprise
See the Best practices guide before using the Estate Costs Comparison calculator.
By choosing segregated funds, your client enjoys many unique benefits, not to mention peace of mind when investing.
