Family Law with Carrie Campbell; Own shares in a privately incorporated business? Consider 2 Wills

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Carrie Campbell

Do you own shares in a privately-owned incorporated business? If so, ask your lawyer if you should consider having two Wills. You will often hear this described as having Primary and Secondary Wills. Typically, the primary Will deals with all of your assets, except those that are defined as being “Excluded”. The “Excluded” assets are then dealt with in your Secondary Will. I hear you asking - Why would I want to incur added expense to have two Wills?

The hope is that this strategy actually saves you (your estate) money. It also makes life easier for your Estate Trustee. Let me explain. When you die, your named executor, called an Estate Trustee in Ontario, may very well need to “Probate” your Will, in order to be recognized as the authorized person to deal with your estate. Whether a Will needs to be probated often depends on the types of assets, how they are owned, what the financial institutions require and whether there is any dispute as to the validity of the Will or the proper Estate Trustee. The process of Probate is formally called, an Application for a Certificate of Appointment of Estate Trustee With a Will. When your Estate Trustee makes this Application, they will need to set out the value of your assets, less any mortgages you have, and pay an Estate Administration Tax (commonly referred to as Probate Fees) to the Government. When you have two Wills, your Estate Trustee will only apply for Probate of the Primary Will – meaning the value of the assets in your Secondary Will are not included in the calculation of Probate Fees. If you own shares in a privately-owned corporation, those shares may be transferred to your beneficiary in your Secondary Will, without the necessity of including that asset as part of Probate.

Other assets, such as personal effects, may also be included in your Secondary Will. This will then reduce the Probate Fees that are payable by your Estate. After applying for Probate, your Estate Trustee is responsible for confirming the value of your assets to the government. If shares are not part of the Probate, determining their value is one less thing for your Estate Trustee to worry about. Being an Estate Trustee is often difficult; I recommend you try to simplify their job, where possible. Now call your lawyer to discuss!

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