It is the age-old perfect storm: A large inheritance, multiple beneficiaries, and the person at the centre of it all dies with more than one “last” will and testament.¹ The result? Over a century ago, Charles Dickens spelled out the negative effects in Bleak House where an extended legal case erodes the estate to nothing, leaving beneficiaries empty-handed. Variations on this theme echo across real families even now. But, in today’s world, contrary to traditional negative connotations, an intentional multiple wills strategy is proving particularly useful in some Canadian provinces.

Certainly, if you have property in places like France and Mexico, you are familiar with the need for a separate will in keeping with the laws of those jurisdictions. Or you may have different wills with different executors to deal with different assets. In this article, we focus on creating multiple wills to help reduce probate fees. As always, it is important to consider whether your specific circumstances are a potential fit for a multiple wills approach. For example, you may live in a province where probate fees are not a material concern. But if you live somewhere like British Columbia or Ontario where probate fees are currently 1.4% and 1.5%,² respectively, it is worth being aware of a multiple wills strategy.

Important Reminders About Probate

Here are worthwhile points to note:

• To be able to fully administer your estate, your executor³ may need the court to officially declare a will valid and appoint a personal representative (generally the executor) to act on behalf of a deceased person’s estate by issuing a Grant of Probate.
• Third parties (such as land title registries and financial institutions) rely on the Grant as proof of the executor’s authority. Typically, they need to receive a Grant of Probate before releasing assets to the executor.
• Probate assets are those that you own at your death that pass through your estate (i.e., your house or cottage and your investments) and need third-party consent to transfer the assets to your executor. Note: Assets passing directly to a beneficiary outside your estate (including joint property, life insurance or RRSP/RRIF accounts) do not require probate.
• Non-probate assets are assets you own at your death that pass through your estate but do not require third-party consent to transfer the assets. These include assets like art or other valuable collections and, notably, private company shares.
• “Probate fee” is a generic term applied to a provincial tax that is calculated as a percentage of the value of probate assets.

Reducing Probate Fees

Using a multiple wills strategy involves grouping assets under different wills. For instance, you may allocate all assets that require probate in your jurisdiction (i.e., real estate and bank accounts) to a primary will, while the secondary will deals with non-probate assets such as art, antiques, jewelry and shares of private corporations. Keep in mind, your executor chooses which, if any, will to probate and such taxes apply only to the probated will(s).

Example 1 below shows how multiple wills can save provincial probate fees. Michael is a retired Ontario doctor who, during his career, accumulated wealth in a private corporation. Today, his estate consists of his home in Ontario worth $1 million, an investment portfolio worth $1 million, an art collection worth $250,000 and the shares of his private corporation worth $1 million. Michael has appointed his son Sean as executor and has left his estate in equal shares to his two children, Sean and Heather.

Example 1:

As described above, if Michael uses a single will for his entire estate, probate fees would be:

 

Example 2 below shows how, based on specialized legal and wealth management advice, Michael creates two wills. The primary will governs his house, investment portfolio, and anything else not covered by the secondary will. Michael’s secondary will governs his art collection and private corporation shares. Sean is named executor for both wills.

Example 2:

Using two wills, as described above, Sean applies for probate of the primary will only, and fees would be:

 

Sean does not need probate to administer assets covered by the secondary will. The art collection can be sold or divided between Sean and Heather. The private corporation shares can be transferred to Sean as the estate’s executor without probate, and the company can be wound up and the proceeds distributed between Sean and Heather. By using two wills, Michael’s estate saves $18,750 ($48,000-$29,250) in probate fees

Does having a secondary will mean it is automatically probate proof? No, some conditions mean a secondary will must be probated. For example, if a beneficiary challenges one of your wills, or if a secondary will creates a trust that requires ongoing fund administration, then the financial institution may need a probated will to open the trust account and protect itself from potential liability.

Potential Disadvantages Of Multiple Wills

It is worth recognizing at the outset that there are disadvantages to the multiple wills strategy:

• Legal fees to create two wills may be significantly higher than the cost of creating one will. Unless the non-probate assets are substantial, costs could exceed the benefits.
• The legal language in both wills must be very precise to ensure one will does not revoke the other. It must be clear how debts and expenses will be paid.
• The period during which someone can challenge a will may begin when probate is granted. If a will is not probated, the right to challenge the will might exist forever.

A multiple wills strategy to help manage probate fees can be a real advantage in certain circumstances. For instance, if you own shares in a private corporation in Ontario, your financial advisor or lawyer has likely asked you to consider creating a primary and secondary will. Conversely, while Nova Scotia currently has the highest probate fees in Canada, the multiple wills strategy does not work under that province’s law. In British Columbia, the strategy applies with some nuances, such as needing to name a different executor for each will. In Ontario, one executor will do.

Clearly, this is not a one-size-fits-all approach. We recommend asking your professional advisory team to help you weigh the pros and cons of the multiple wills strategy for your situation and confirm its effectiveness in your province. In the right place, it can be the right strategy for your estate.

 

 

 

1. It is generally understood that, unless a contrary intention is stated, when you make a new will, it is meant to replace any previous one. To avoid any uncertainty, most wills begin with a paragraph that expressly says the document revokes all earlier wills. Most estate planners will also recommend that older wills be destroyed to avoid any confusion about the document intended to be your final will. There have been situations where the most recent will was successfully challenged and found to be invalid, causing an earlier will to become the legally binding will of a deceased person.

2. “Tax Facts and Figures Canada 2022,” PricewaterhouseCoopers LLP, July 27, 2022, https://www.pwc.com/ca/en/tax/publications/tax-facts-figures-2022-en.pdf

3. In Ontario, an executor is called an “estate trustee with will” and in Quebec the correct term is “liquidator.” We use the generic term “executor” as it is concise and understood in every province.