Death, Taxes & Secondary Wills

Even in death we often can’t escape the tax man. When we die, estate administration tax, or “probate fees,” become payable. These fees, which are approximately 1.5% of the value of a deceased’s estate, can add up.

However, some smart estate planning by your lawyer can limit and sometimes avoid the payment of probate fees.

Well let’s back up, and start with the basic’s: what’s probate?

Probate, also known in Ontario as a “Certificate of Appointment of Estate Trustee,” is a process where the court certifies a deceased’s will and the appointment of the deceased’s estate trustee. This process requires the payment of the estate administration tax mentioned above.

Since no one likes paying tax, whether alive or dead, you can take some comfort in knowing that probate isn’t always required. For example, if the deceased leaves real property that needs to be transferred or sold, that will require probate. The problem is if you have one asset that attracts probate, then your entire estate under your will dealing with that asset must be probated.      

Well guess what folks – as you may have already guessed from the title of this blog – you can have more than one will!

As probate fees increased over the last few decades in Ontario, some savvy estate lawyers started finding ways around too much taxation. Essentially you can use one will to deal with assets that require probate and the other for assets that don’t attract probate on their own. People also often use secondary wills to deal exclusively with their business assets.     

And that’s not all – I bet you didn’t know that wills probated by the court become a public document. So secondary wills, which don’t attract probate, provide greater privacy as well to the deceased, their beneficiaries, and their estate. 

While there really isn’t anything more certain than death and taxes, a little estate planning can’t hurt.   

Robin K. Mann, J.D., Associate Lawyer