By: Winnie J Luk
The use of dual wills is an effective estate-planning tool in Ontario, specifically in situations where the testator, who is the person with the will, owns or will own shares in a private company, a home registered under the Registry System, or significant personal property.
Generally, the testator's Primary Will deals with assets for which probate is required. Probate is a process by which Ontario Court certifies that a will was duly proven to be valid and Estate Administration Taxes are paid to grant a certificate of appointment of estate trustee in order to honour the wishes in the will and commence administration of the estate. The Estate Administration Taxes are generally calculated on the fair market value of all property owned where the first $50,000 is taxed at 0.5% and the excess at 1.50%. It is one of the highest estate administration tax rates in North America.
The Secondary Will deals with assets which may avoid probate and avoid estate administration tax. And together, the dual wills cover the entire Ontario estate of the testator. The Estate Administration Taxes that would otherwise be paid on these assets normally outweighs the effort and cost in arranging dual wills. And you would be able to avail more of your assets and estate to your loved ones.
This estate-planning tool exists due to a loophole in Ontario estates legislation confirmed in the 1998 Supreme Court of Canada decision Granovsky Estate v. Ontario (1998) and may only be applied in Ontario. In British Columbia, lawyers have found a way to reduce estate tax in their province’s wills legislation.
The law firm Winnie J Luk Professional Corporation may assist in your Wills and Estates planning matters. To get started with your dual will, please click here.
Disclaimer: This article does not contain legal advice and only provides general information. It is not intended to replace advice from a qualified legal professional and should not be relied upon to make decisions. In all cases, contact your legal professional for advice on any matter referenced in this article before making decisions. Use of this article does not establish a lawyer-client relationship.