In Ontario, using a Multiple Wills strategy allows business owners to legally bypass the 1.5% Estate Administration Tax (EAT) on their private corporate shares. Applying for a limited Certificate of Appointment generally requires paying standard court fees, but a specialized lawyer will typically charge between $1,500 and $4,000 CAD to draft these dual documents.
Owning a private business in thriving Ontario cities like Toronto, Ottawa, or Kitchener is a major financial achievement. However, when a business owner passes away, their hard-earned corporate assets can trigger massive tax liabilities. Under provincial law, the Estate Administration Tax (EAT) is roughly 1.5% on the total value of the estate over $50,000 CAD. If your private company is worth millions, this tax can be financially devastating for your surviving family.
Fortunately, Ontario law permits a brilliant legal strategy known as “Multiple Wills” or “Primary and Secondary Wills.” 💼 By carefully dividing your assets into two completely separate documents, your executor can legally submit only the Primary Will to the probate court, paying taxes only on your personal bank accounts and real estate. The Secondary Will, which holds your private corporate shares, completely bypasses the probate process. This professional guide explains exactly how to implement and administer this powerful estate strategy.
Step-by-Step Process for Probating with Multiple Wills in Ontario
Executing a dual-will strategy requires absolute legal precision. If the wording is flawed, one Will might accidentally cancel out the other, ruining the entire tax-saving plan. Here is the standard legal process.
Step 1: Divide the Estate Assets Carefully
Your estate lawyer will first help you clearly categorize everything you own. Assets that legally require a court order to be transferred-such as standard bank accounts, public stocks, and your primary residence in Ontario-must be placed in the Primary Will. Assets that do not require court approval, specifically your privately held corporate shares and shareholder loans, are securely placed in the Secondary Will.
Step 2: Draft and Sign the Dual Wills
Both documents must be meticulously drafted to ensure they operate simultaneously. 📝 Standard boilerplate Wills usually contain a clause stating, “I revoke all previous Wills.” If this standard clause is used incorrectly, signing the Secondary Will instantly destroys the Primary Will. A specialized estate lawyer will use precise language to ensure both Wills remain legally valid at the same time.
Step 3: Apply for a Limited Certificate of Appointment
When you pass away, your named executor will take the Primary Will to the local Superior Court of Justice. They will apply for a “Certificate of Appointment of Estate Trustee Limited to the Assets Referred to in the Will.” The executor will only pay the 1.5% Estate Administration Tax on the personal assets explicitly listed in this Primary Will, legally ignoring the corporate millions.
Step 4: Administer the Secondary Will Privately
Because private companies are governed by their own articles of incorporation and shareholder agreements, they do not need a judge’s permission to transfer shares. 🔒 Your executor can take the Secondary Will directly to the corporation’s board of directors or the company lawyer. The shares are then smoothly transferred to your beneficiaries completely tax-free and entirely outside of the public court system.
Step 5: File the Estate Information Return (EIR)
Within 90 days of receiving the Certificate of Appointment for the Primary Will, the executor must file an Estate Information Return with the Ontario Ministry of Finance. This mandatory government form strictly details the appraised value of the probated assets. The private corporate shares securely held in the Secondary Will are entirely excluded from this provincial tax return.
How Much Does it Cost in Ontario?
Setting up Multiple Wills costs slightly more upfront, but the eventual tax savings are astronomically higher.
- Legal Drafting Fees: Having a specialized Ontario estate lawyer draft both the Primary and Secondary Wills typically costs between $1,500 and $4,000 CAD.
- EAT Tax Savings: If your private company is valued at $2,000,000 CAD, bypassing probate on those shares permanently saves your family exactly $30,000 CAD in provincial taxes.
- Probate Application Fees: When the executor eventually probates the Primary Will, they will pay the standard EAT (1.5% on personal assets over $50,000 CAD) plus minor courthouse filing fees.
How Long Does the Probate Process Take?
Handling two separate tracks for asset distribution changes the standard estate timeline. ⌛
| Estate Administration Phase | Estimated Timeline in Ontario |
|---|---|
| Drafting the Multiple Wills | 3 to 6 weeks |
| Transferring Corporate Shares (Secondary Will) | 1 to 3 weeks after death |
| Receiving the Certificate (Primary Will) | 3 to 8 months (depending on court backlogs) |
| Filing the Ministry of Finance EIR | Strictly 90 days after receiving the Certificate |
Frequently Asked Questions (FAQ)
Can I put my house in the Secondary Will to avoid taxes?
No. In Ontario, the Land Registry Office absolutely requires a Certificate of Appointment (probate) to legally transfer land that is solely in the deceased’s name. Therefore, regular real estate must remain in the Primary Will and is subject to the Estate Administration Tax.
Do I need two different executors for the two Wills?
You generally do not. Most business owners appoint the exact same trusted person (such as a spouse or adult child) to be the Estate Trustee for both the Primary and Secondary Wills. They will simply manage two different sets of assets.
Does the CRA audit Secondary Wills?
While the Secondary Will bypasses the provincial probate court, it does not bypass federal income taxes. The deceased’s final T1 tax return must still declare any deemed disposition of the corporate shares, meaning standard capital gains taxes to the Canada Revenue Agency (CRA) still apply.
Can this strategy be used for personal jewelry or art?
Yes. If you own a massively valuable art collection or expensive family heirlooms, these can often be placed in the Secondary Will. Because you do not need a court order to physically hand a painting to your child, these assets can legally bypass the 1.5% probate tax.
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