Multiple Wills

Did you know that in the case of Granovsky v. Ontario [1998] O.J. No. 508, the Ontario Court of Justice upheld the right of an individual to have multiple wills? Yes, that’s right, you can have 2 or more wills.

So what does this mean for you? Well it means that you can separate your assets between a “primary will” and a “secondary will” and each will would only deal with those assets identified therein. The reason this is attractive is that it allows one to avoid the payment of tax – called probate fees - which can be significant depending on the value of the estate.

In Ontario, the estate trustees of an estate with a will (“Trustees”) – formerly executors - are often required to apply for a Certificate of Appointment of Estate Trustees with a Will (a “Certificate”) – formerly called letters probate - before they can deal with the assets of the estate. This application requires that tax be paid on the value of the assets of the estate identified in the will submitted for a Certificate (subject to certain exceptions).

There may be certain assets of the deceased which are subject to tax but for which a Certificate is not required to deal with. An example would be the shares held in a private corporation. Through the use of multiple wills these assets can be distinguished (the “Distinguished Assets”) and administered by another will, a “secondary will”. The Trustees would submit only the “primary will” for a Certificate and the value of the estate on which the tax would be calculated would be based solely on the value of the assets identified in the “primary will”. Thus, the tax would be reduced by the value of the Distinguished Assets providing the estate with savings. The greater the value of the Distinguished Assets, the greater the savings.

In the case in question the testator had distinguished certain shareholdings, receivables and assets held in trust resulting in a saving on the tax of approximately $370,000.00.

With careful estate planning, proper drafting, and the right fact situation multiple wills can be an effective means of reducing the tax payable by an estate, but we caution, it is not for everyone. Each person’s situation is unique and the determination of whether or not to use multiple wills should be made as part of an overall estate planning strategy.

If the idea of multiple wills interests you or for further information on multiple wills or general estate planning contact our office and we will be happy to discuss these matters further.