|Sursa d-voastra de Estates si Real Estate Law - Multiple Wills – why use them?|
Estate administration tax is paid on the value of every estate, at the time a Certificate of Appointment (also known as probate) is issued by the court.
The value of the estate is calculated as the sum of all assets owned by the deceased at their date of death, excluding certain assets held in joint tenancy, the value of registered bank accounts with a named beneficiary, real estate owned outside of Ontario and any encumbrances on Ontario real estate.
In order to transfer title of the real estate assets, or to have access to the deceased’s bank account to pay debts, the estate trustee needs to obtain probate. However, some assets can be administered without probate: personal effects and shares in private corporations.
Therefore, one can execute a will for the assets that require probate and another for the assets which do not require probate.
The benefit of this estate planning strategy is that any assets captured under a secondary will are not probated, and therefore, they do not carry estate administration tax.
Since a will takes between 3-6 months to get probated in Toronto, until which time few estate administration activities take place, the estate trustee will also find it easier and time-efficient to administer the assets under the non-probate will.
These wills have to be drafted properly so they don’t revoke each other, and the assets covered under each have to be properly defined, otherwise the non-probate will risks being tainted, and the executors will have to apply for a Certificate of Appointment on the non-probate will in addition to the probate will.
If you have any questions about this topic, I would love to help!
PLEASE NOTE THAT THE CONTENT OF THIS BLOG IS MERELY FOR INFORMATION PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.
Raluca M. Soica, BBA, CPA, CMA, JD
Raluca M. Soica 6/3/2020