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

When someone dies, it often leaves their loved ones wondering about how they should start administering the estate. If the deceased leaves a will, the courts need to verify its validity. If the deceased didn’t write a will, the courts take on the responsibility of deciding a fair distribution of the estate and appointing an estate administrator. Ultimately, it can become confusing and stressful for those involved with handling a loved one’s estate. In this blog we’ll clarify the difference between processes of probate and letters of administration.

Probate

Probating a will ensures its authenticity, confirms it was left by the deceased, and validates the executor’s authority to manage the deceased person’s estate. The executor must apply to the court for a grant of probate, which can make probate a lengthy process. The court gives the grant of probate to the executor once they prove their legal authority over the estate. Probating a will aims to prevent the improper handling of large assets after the owner’s death.

If the will-writer doesn’t own land, a large bank account, or a large investment account, their estate assets don’t meet the minimum value required for a grant of probate.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. If the value of the estate is above $25,000, excluding any joint tenancy assets and assets with designated beneficiaries, the will must be granted probate.

Letter of Administration

If a person dies without leaving a valid will, the courts decide the distribution of the person’s estate. 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 can apply for a letter of administration to receive executor-like duties as the estate administrator. In our estate blog on dying intestate – who becomes the executor (or administrator), we discussed the order of priority for multiple applicants.

In some cases, a person leaves a valid will; however, it does not account for all of their assets. When this happens, the Court grants probate to the will and must also award a letter of administration 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. Someone must obtain a letter of administration to distribute the savings account, and to distribute the remaining assets, the valid will needs a grant of probate.

Probate Fees

Whether the court grants probate or a letter of administration to the estate, it must pay approximately 1.4% of the total estate’s value plus a $200 court filing fee. However, if the value of the estate assets is 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. When an individual dies fully or partially intestate, the distribution of assets requires obtaining a letter of administration. In the case of a properly validated will, the executor typically needs to secure a grant of probate, eliminating the need for anyone to receive a letter of administration.

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.