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Multiple Wills
Michael E. Cobb
Michael E. Cobb

July 2010-Many of you may be unfamiliar with multiple wills. Let me explain what they wills are and how they may be used to save significant estate administration tax (commonly called probate fees). In order to administer an estate and transfer certain assets from the deceased person to the proper beneficiary, it is often necessary to apply to the Ontario Superior Court of Justice to obtain a Certificate of Appointment of Estate Trustee (commonly called Letters Probate). The Ontario Government charges probate fees when the application is filed with the Court. Probate fees can be significant and are calculated upon the value of practically all of the deceased's assets at death. The rate of probate fees is currently $5 for each $1,000 of the first $50,000 of the value of the estate, and $15 for each $1,000 of the value of the estate in excess of $50,000. In order to reduce the amount of probate fees, one estate planning strategy is to use multiple wills. This involves preparing a "primary" will for property on which probate fees must be charged and a secondary will for property that can be transferred without a Letters Probate. The 1998 case of Granovsky v. Ontario laid ground work for this technique. Mr. Granovsky died leaving two wills which were executed on the same date; a "primary" will for a $3.2 million estate consisting mostly of real estate, and a "secondary" will for a $25 million estate consisting of shares of a private corporation. Since Letters Probate was not required to deal with the private corporation shares, the "secondary" will was not submitted to the court and no probate fees were paid on their value. The Court determined that the use of multiple wills in Ontario constitutes a valid method of estate planning and represents "another example of how a careful testator plans to have his or her estate pay the least possible probate fees". The Province of Ontario initially indicated that it would appeal the Granovsky decision, but did not do so nor did it amend it's legislation. Accordingly, the multiple wills strategy for assets located in Ontario can now be utilized as an Estate Tax planning strategy even for risk averse clients. This is just one of a number of techniques for reducing the tax bite upon death. For more information on this or other tax reducing possibilities, consult with a lawyer who does estate planning, as well other professional advisors like accountants and financial planners.

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