Multiple Wills Strategy in Estate Planning

The use of multiple Wills as a strategy to reduce or avoid probate fees payable on death was first considered by Ontario estate practitioners after the government tripled these fees in 1992.  Previously, the strategy was used primarily to deal with assets situated in different jurisdictions, or as a way for testators to appoint different estate trustees (often referred to as executors) to deal with specific assets.  Following the increase in probate fees, estate practitioners contemplated preparing two (or more) “Last” Wills contemporaneously: (i) a Primary Will to distribute assets for which probate is required, such as real property, accounts at financial institutions and shares of public corporations, and (ii) a Secondary Will to dispose of assets for which probate is typically not required, such as shares of private corporations, unsecured loans, and household and personal effects such as antiques, vehicles, art and jewelry. Only the Primary Will is then submitted for probate, thereby sheltering the assets passing through the Secondary Will (i.e., the assets not requiring probate) from probate fees, which are now referred to as estate administration tax in Ontario.  

What is “Probate”? 

Probate is the administrative process to validate a Will and confirm the authority of the estate trustee to act on behalf of the estate.  While the estate trustee’s authority derives from the Will itself, third parties often require probate to release estate assets to the estate trustee or to effect transfers of certain property.  Where required, a court grants this authority by issuing a probate certificate known as a Certificate of Appointment of Estate Trustee With (or Without) a Will.  The purpose of probate is to certify that the Will is valid and that proper notice is provided to all interested parties.  It also helps to ensure the payment of all taxes and liabilities associated with the estate.  The process by which a Will is probated provides assurances to third parties such as financial institutions of the estate trustee’s authority to act on behalf of the estate as the court-endorsed estate representative.  

The Use of Multiple Wills in Ontario 

Dual or multiple Wills have become increasingly commonplace in Ontario, particularly where a testator holds private company shares of considerable value, since the rate of estate administration tax is the highest among all Canadian provinces and territories.  Furthermore, the provisions of Ontario’s Business Corporations Act^[1] and the Securities Transfer Act^[2] give discretion to directors of a closely-held corporation to allow the transfer of a deceased shareholder’s shares without probate.  Accordingly, it seemed to follow that if directors of private corporations in which a deceased owned shares did not require a formal court grant (i.e., probate) to deal with the transfer of those shares, these assets should not then have to form part of the “probated estate” on which probate fees are levied.  The strategy further affords privacy in respect of the assets governed by the Secondary Will, and circumvents the requirement for valuation of certain assets, which facilitates the administration of the estate.  

The multiple Wills strategy was endorsed by the Ontario court in Granovsky,^[3] a 1998 case in which the deceased’s estate saved over $375,000 in probate fees by dividing assets between two separate Wills.  The court confirmed that both the Primary and Secondary Wills of the testator were valid testamentary instruments despite only the Primary Will having been formally probated.  The court also confirmed that testators have a right to organize their affairs in a manner that minimizes the amount of estate administration tax payable in respect of their estates, including through the preparation of dual or multiple Wills.  Although the Ontario government initially indicated that it would appeal the court’s decision in Granovsky, it later abandoned its position and subsequent cases have confirmed the validity of the multiple Wills strategy as an effective estate planning device.^[4]   

The appropriateness of a multiple Wills strategy depends on the testator’s wishes and intentions, the nature and value of estate assets, where estate property is situated, and the anticipated savings flowing from the implementation of the strategy.  The allocation of tax liabilities, debts and testamentary expenses between or among the various parts of the estate passing through each Will must also be weighed carefully to ensure that the final distribution is achieved as intended.  Specialized drafting is required to ensure that the respective Wills do not inadvertently revoke each other, and any ambiguity in the drafting of the Wills could result in interpretation issues requiring court involvement and potential conflict among beneficiaries and estate trustees.  

Nonetheless, the multiple Wills strategy, whether used alone or in conjunction with other probate and tax minimization strategies, remains a crucial estate planning technique for many testators, and business owners in particular.  

This article was written by a member of the Wills, Estate & Trusts team at McKenzie Lake. If you require assistance with a Wills, Estate & Trusts matter or wish to speak to a lawyer at McKenzie Lake Lawyers LLP, please call (519) 672-5666.

---

^[1] Ontario Business Corporations Act, R.S.O. 1990 c. B.16 

^[2] Securities Transfer Act, 2006, S.O. 2006 c. 8  

^[3] Granovsky Estate v. Ontario, CanLII 14913 (ON SC)  (“Granovsky”) 

^[4] While the decision in Re Milne Estate, 2018 ONSC 4174, caused much consternation among estate lawyers in Ontario, the decision was overruled on appeal and the issue of whether the multiple Wills strategy could continue in use as it had since its endorsement in Granovsky was resolved by the Divisional Court in Milne Estate (Re), 2019 ONSC 579.