Primary & Corporate Wills for Medical Professionals and Business Owners
By: Winnie J Luk
The use of dual wills is an effective estate-planning tool in Ontario, specifically in situations where the will-maker, owns a professional corporation in the health industry or business.
Under this strategy, the will-maker will have two (2) wills: a Primary Will and Secondary Will.
The Secondary Will would generally contain the private shares of the professional corporation and will NOT be subject to Estate Administration Tax. Ontario is the only province in Canada that permits this strategy due to a loophole in Ontario estates legislation confirmed in Granovsky Estate v. Ontario (1998) and most recently Re Milne Estate, 2019 ONSC 579.
The Primary Will would contain all other estate that by law is subject to Estate Administration Tax as it is the Primary Will that gets filed for probate.
If the will-maker were to have only a single will combining all the estate including the professional corporation (and not a Secondary Will to separately contain the professional corporation shares), then all the estate would be subject to Estate Administration Tax, there would be no tax-savings permitted. In Ontario, 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 the highest in Canada.
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.
Landmark Law may assist in your Wills and Estates planning matters. To get started with your dual will, please contact us.
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.
Prescribed Information for the Purposes of Section 5.0.1 Form