What’s the deal with Multiple Wills? So many people don’t even have one Will. Why the need for Multiple Wills or a Secondary Will?
A Will is a testamentary document that contains your estate distribution instructions – your last wishes, among other things. Who will get what, when, and who will take care of your minor children if you have any.
Your Will is submitted to the court for Probate, for what is formally known as a Certificate of Appointment of Estate Trustee.
The Estate Administration process approves and confirms the Trusteeship role in your Will, and involves paying Estate Administration Tax, which is currently set at 1.5% in Ontario over and above the first $50,000.
While 1.5% is not exorbitant; there are other taxes one should plan for which could have a greater impact, like capital gains tax and income tax on the beneficiaries, there is still planning that can and must be done to avoid the 1.5% Estate Administration Tax on death.
A Secondary Will was introduced in Ontario by the Granovsky v Ontario, 1998 case. I had the honour of speaking with Donald Carr about his involvement in the Granovsky case and it’s impact in one of the first SpeaktoaLawyer podcast episodes. I am not proud of the audio quality in the episode yet I still cherish Mr. Carr’s words.
In short, the point of a Secondary Will is that those assets governed by the Secondary Will will be excluded from the Estate Administration process, and thus save you the 1.5% ‘probate tax’.
Typically, private owned corporate shares that one controls, partnership interests, Registry real estate, certain Trust assets and some personal effects can be included in Secondary Will. If done right, and here the emphasis is on proper estate planning, you can save a significant amount of taxes.
There are other reasons as well for having multiple wills, for example, a Situs Will governs foreign property. If you have foreign property, the addition of a foreign Will is usually recommended.
For the Multiple Will strategy to work, it is crucial that Wills are crafted carefully and by a professional lawyer who specializes in estates law, so as to avoid confusion, potential conflict and even the tragedy of invalid Wills all together. Proper estate planning, by using Multiple Wills, can leave more wealth in the hands of your beneficiaries and less money in the hands of the government (taxes).
We pride ourselves of providing estate planning services to business owners and professionals who require incorporation services and Multiple Wills.
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The general information on this page is not applicable to any specific case and is intended for information purposes only. It is not a substitute for legal advice and may not be relied on as such. Readers are expressly advised to consult with a qualified lawyer for advice regarding their specific circumstances and entitlements under Ontario law.
