Most business owners have one will, drafted years ago, that quietly does something expensive. It sweeps everything they own, including the shares of the company they spent a career building, into a single document that has to be probated. And probate in Ontario has a price.
When your executor applies to the court to confirm a will (a Certificate of Appointment of Estate Trustee, what everyone still calls probate), Ontario charges Estate Administration Tax on the value of the assets governed by that will. There is no tax on the first $50,000. Above that, it is $15 for every $1,000, which works out to about 1.5%. It sounds small until you put a company through it. A $2 million estate pays roughly $29,250. The tax is on the value passing through the will, and it does not care that the value is a private business rather than cash.
Here is the part that stings. Private-company shares usually do not need probate at all to change hands. There is no public registrar demanding a court certificate before the shares can be transferred; the company’s own directors and its minute book can handle the transfer to your estate. Real estate and public investments often do need probate. Private-company shares generally do not. So when a single will drags those shares through probate anyway, you are paying 1.5% of your company’s value to solve a problem you did not have.
The solution is to sign two valid wills on the same day. The primary will covers the assets that genuinely require probate, real estate in your own name, bank and public-investment accounts that the institution will not release without a certificate. The secondary will covers the assets that do not, above all the shares of your private company, along with things like shareholder loans owing to you and personal effects. When you die, your executor probates only the primary will and pays tax only on those assets. The secondary will governs the company shares privately, and never touches the court, so no Estate Administration Tax is charged on them. The two wills are drafted to work together and not revoke each other, usually with an allocation (or “basket”) clause that lets the executor decide which assets fall where.
Yes, and it is long-established. Multiple wills to keep private assets out of probate have been used in Ontario for decades. A 2018 decision briefly cast doubt on the discretionary basket clause, but the Divisional Court settled it in Milne Estate (Re), 2019 ONSC 579, confirming that a will is not a trust and does not need certainty of subject-matter to be valid, and that multiple wills with basket clauses are sound. The strategy is mainstream planning, not a loophole. It does need to be drafted properly, which is exactly where the do-it-yourself versions come apart.
Anyone who owns shares in a private corporation of real value: the owner of an operating company, someone who holds a family holding company, a professional with a professional corporation. The bigger the private-company value relative to the rest of your estate, the more a second will saves. If your wealth is mostly a house and a bank account, one well-drafted will is fine. If a meaningful part of your net worth sits inside a company you control, you are the person this is built for.
Three ways, mostly. The first is home-made or mismatched wills where the later document accidentally revokes the earlier one, collapsing the whole plan. The second is failing to coordinate the wills with the rest of your structure, your shareholder agreement, any estate freeze, the company’s minute book, so the pieces contradict each other. The third is simply letting the wills go stale after you sell the company, buy a new one, or the law shifts. Dual wills are a plan, not a filing; they need to match your actual holdings.
I prepare primary and secondary wills for business owners as part of a proper estate plan, coordinated with your shareholder agreement and, where it fits, an estate freeze, and in step with your accountant on the tax side. I quote a fixed fee up front. For an owner with real value locked inside a private company, this is one of the highest-return hours you can spend on your estate, because the saving is measured in tens of thousands and the work is largely one-time. If you have a single will and a company, it is worth a short call to see what a second will would save.
Ontario's Estate Administration Tax is nil on the first $50,000 of estate value, then $15 per $1,000 (about 1.5%) on the value above $50,000. A $2 million estate pays roughly $29,250. The tax applies to the assets governed by the will that is probated.
It is a second will, signed alongside your primary will, that governs assets which do not require probate to transfer, most importantly the shares of your private company. Because the secondary will is never submitted to court, no Estate Administration Tax is charged on the assets it covers.
Usually not. Unlike real estate or public investments, private-company shares can generally be transferred by the company's directors through its own records and minute book without a court certificate. That is why keeping them in a separate, un-probated will avoids tax that a single will would trigger.
Yes. Multiple wills have been used for decades, and the Divisional Court confirmed their validity, including discretionary allocation (basket) clauses, in Milne Estate (Re), 2019 ONSC 579. They must be drafted properly so the wills do not revoke each other.
Roughly 1.5% of the value kept out of probate. If $2 million of private-company value is governed by a secondary will instead of a probated primary will, that is about $30,000 saved. The larger the private-company value, the larger the saving.
Owners of private-corporation shares of meaningful value: operating-company owners, holders of family holding companies, and professionals with professional corporations. If most of your estate is a home and bank accounts, a single well-drafted will is usually enough.
It is risky. The most common failure is a later will accidentally revoking the earlier one, which collapses the plan, or wills that do not match your shareholder agreement and corporate records. Dual wills should be drafted together, by a lawyer, as a coordinated plan.
Yes. If you sell the company, start a new one, do an estate freeze, or the law changes, the wills should be reviewed so they still match what you actually own. Dual wills are a living plan, not a one-time filing.
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