How Many Wills Do You Need?
The answer is probably two. That may come as a surprise to many, but this is an estate planning technique which is helpful in reducing or eliminating estate administration fees. Formerly, in Ontario, that used to be referred to as “Probate fees”, and although technically incorrect, the expression is still used quite commonly.
The rate is 1.5% of the assets over and above the first $50,000.00 of assets (slight discount for the first $50,000.00).
Assume Bob has three groups of assets, each worth $1 million dollars:
- House
- Shares in a mutual fund
- Shares in a Private corporation
The probate fees would be $15,000.00 per million or $45,000.00 if all his assets were to be distributed under his Will.
So, let’s change that around:
- The house could be placed in Joint Tenancy,
- The Mutual Fund shares could be place in Will #1, and
- The shares in the private corporation could be placed in Will #2.
This arrangement will save $30,000.00 in probate fees. Only Will #1 is actually submitted for probate (being an Application for a Certificate of Appointment with Will Annexed).
The value of the house and the private company shares are not included in the probate.
If we move the house into Joint Tenancy and just have one Will, then the total value of all assets under the Will be $2 million. That means $30,000.00 in probate fees. So, let’s move the private company shares over to Will #2. We just saved another $15,000.00 because Will #2 does not need to be probated.
Of course, the answer to the question might be three or more, if there are assets located in another jurisdiction. This can get complicated. A Will is simply one document in an estate plan. It’s not the Estate Plan!
Best course of action is to seek professional advice.
Brian Madigan LL.B, Broker