In Ontario, when someone passes away, certain of their assets may require a Certificate of Appointment of Estate Trustee (either with or without a Will) in order to be administered and transferred by the deceased’s estate trustee(s). These assets typically include assets with registered title, such as bank accounts and most real estate in Ontario (subject to certain exceptions). A Certificate of Appointment of Estate Trustee is a certificate issued by a Court certifying that the individual(s) named as executors in an Application for a Certificate of Appointment of Estate Trustee are the trustees for the deceased’s estate. The Certificate of Appointment of Estate Trustee confirms the authority of the estate trustees to administer and transfer the estate, either in accordance with the deceased’s Will, or by the laws of intestacy if the deceased passed away without a Will.
When making an Application for a Certificate of Appointment of Estate Trustee (formerly known as “letters probate”, and commonly referred to as “probating” or a “probate application”), the value of the deceased’s estate is included in such application. On making the application, estate administration tax is payable to the Minister of Finance and is calculated based on a percentage of the value of the deceased’s estate (currently, 0.0% on the first $50,000.00 of the estate and 1.5% on everything above $50,000.00); this estate administration tax is sometimes also referred to as “probate fees” or “death tax”.
Accordingly, even relatively simple estates may have considerable estate administration tax owing on an Application for a Certificate of Appointment of Estate Trustee. However, depending on the nature of someone’s assets, they may be able to minimize or limit the estate administration tax payable.
Through the use of multiple Wills, a testator (the person signing the Will) can separate the assets of their estate into two Wills: a Primary/Public Will, which is used to administer and transfer their assets requiring a Certificate of Appointment of Estate Trustee; and a Secondary/Private Will, which is used to administer and transfer their assets that do not require a Certificate of Appointment of Estate Trustee. A Secondary/Private Will may be useful if a testator’s estate has significant assets which do not require probate, as the value of these assets will not be included in the probate application for the Primary/Public Will. Such secondary/private assets include, but are not limited to, personal property, art, jewelry, shares in a privately held corporation and certain real estate in Ontario which is subject to an exemption and does not require probate in order to be transferred.
By using multiple Wills, only the value of the deceased’s primary/public estate that requires probate is included in an Application for a Certificate of Appointment of Estate Trustee. Accordingly, the value of the deceased’s secondary/private estate is excluded from the probate application, thereby reducing the value of the estate being probated, which correspondingly reduces the estate administration tax payable. Multiple Wills, however, must be consciously considered and carefully drafted so as to not revoke either Will, thereby defeating the intent of using multiple Wills.
To find out more about multiple Wills and whether you may benefit from such estate planning measures, please contact an estates lawyer at Parente, Borean LLP at info@parenteborean.com.