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From $0 to $14,250 on a $1M estate — and why Ontario is the only one of the five without provincial RRSP creditor protection
Segregated funds are usually sold on two estate features: skipping probate and protection from creditors. We checked the statutes in BC, Alberta, Saskatchewan, Manitoba and Ontario. Depending on where you live, those features are worth anywhere from five figures to almost nothing.
Ontario's Estate Administration Tax exempts the first $50,000 and charges $15 per $1,000 above it. BC exempts the first $25,000, charges $6 per $1,000 from $25,000 to $50,000 and $14 per $1,000 above that (Probate Fee Act, s.2). Saskatchewan charges $7 per $1,000 with no exemption and no cap. Alberta caps fees at about $525. Manitoba abolished its probate fee on November 6, 2020.
Only assets that pass through the estate are charged. Registered accounts (RRSP, RRIF, TFSA) with a named beneficiary already skip probate in all five provinces, wherever they are held, so the segregated fund advantage is really about non-registered savings. Lawyers' fees for administering an estate apply everywhere, including Manitoba.
That is the part families actually feel. When someone dies, a non-registered bank or brokerage account is frozen until the estate’s representative has legal authority — which normally means waiting for probate. The mortgage, the bills and the funeral do not wait. A segregated fund with a named beneficiary is paid directly to the beneficiary on proof of death: the money is never frozen and never waits for the estate.
In bankruptcy, the federal Bankruptcy and Insolvency Act protects RRSPs and RRIFs in every province, except contributions made in the 12 months before bankruptcy. Outside bankruptcy — a lawsuit judgment, an unpaid business debt — it comes down to provincial law.
Four of the five provinces protect registered plans outside bankruptcy: BC (Court Order Enforcement Act, s.71.3, since November 2008), Alberta (Civil Enforcement Act, since October 2009, though not against a secured creditor enforcing its security), Saskatchewan (Enforcement of Money Judgments Act, Part 9) and Manitoba (Registered Plan (Retirement Income) Exemption Act). Ontario has no equivalent for bank or brokerage plans.
In Ontario, the exception is an RRSP or RRIF issued by an insurer with a spouse, common-law partner, child, grandchild or parent as beneficiary, which is protected under the Ontario Insurance Act. That makes Ontario the province where the insurance wrapper does the most work.
The Bankruptcy and Insolvency Act does not protect TFSAs — the 2008 amendments covered only RRSPs and RRIFs — so in bankruptcy a TFSA is treated like any other asset. Quebec is the only province with any TFSA creditor protection; BC explicitly left TFSAs out when it protected registered plans.
Holding a TFSA inside a segregated fund contract with a qualifying beneficiary brings it under provincial Insurance Act protection. Outside Quebec, it is effectively the only way to put tax-free savings beyond creditors' reach — and unlike probate savings, this argument is the same in all five provinces.
Ontario: the strongest case — the highest probate tax, no provincial protection for bank RRSPs, and no protection for TFSAs. BC: strong for non-registered savings because of high probate fees, but bank RRSPs and RRIFs are already protected by statute, so the creditor-protection case narrows to TFSAs and non-registered money. Saskatchewan: moderate probate fees and the same statutory RRSP protection put it in the middle.
Alberta and Manitoba: the probate argument barely exists, and RRSPs and RRIFs are already shielded from creditors by statute, so the insurance wrapper adds little protection for those accounts. The case there rests on the principal guarantee, TFSA creditor protection, faster payout to beneficiaries without waiting for a grant of probate, and privacy, since probate records are public.
Take $300,000 of non-registered savings in Ontario: probate would be about $3,750, paid once. If a segregated fund cost even 0.5 percentage points a year more than the alternative — a hypothetical figure; check the actual MERs — that is about $1,500 a year, and the probate saving is used up in two and a half years.
So probate alone rarely justifies a segregated fund. The stronger reasons are creditor protection for people who need it, the downside guarantee, and getting money to beneficiaries quickly. Both the creditor protection and the direct payout depend on a proper beneficiary designation — a family-class beneficiary such as a spouse, child, grandchild or parent, or an irrevocable one; without it, the higher fee mainly buys the maturity and death guarantees. Creditor protection is not absolute either: money moved to defeat existing creditors can be clawed back. Statutes are as checked in October 2026; this is general information, not legal or investment advice.
Ontario. It has the highest probate tax of the five, and it is the only one without provincial creditor protection for bank and brokerage RRSPs outside bankruptcy.
Probate is not one — Manitoba charges no probate fee — and RRSPs and RRIFs are already protected from creditors by provincial statute. The reasons that remain are the principal guarantee, creditor protection for a TFSA, and faster, private payment to your beneficiaries.
Yes, in all five provinces. Registered accounts can name a beneficiary (or a successor holder for a TFSA) wherever they are held. The segregated fund advantage on probate applies mainly to non-registered money.
A non-registered bank or brokerage account normally is: it stays frozen until the estate’s representative has legal authority, which usually means waiting for probate. A segregated fund with a named beneficiary pays the beneficiary directly on proof of death, so the money is not frozen and does not wait for the estate. Registered accounts with a named beneficiary are also paid directly.
No. It depends on naming a family-class or irrevocable beneficiary, and courts can reverse transfers made to defeat existing creditors or while insolvent. Ask a lawyer before relying on it.