New Caselaw on Multiple Wills

Special Alert: October 29, 2018 | Martin J. Rochwerg, Rahul Sharma, Carla Figliomeni, Rosanne T. Rocchi, Jag Gandhi, Stephen Sweeney

Milne Estate (Re), 2018 ONSC 4174

A recent decision of the Ontario Superior Court of Justice may have an impact on your Wills if you have multiple Wills.

For some time now Ontario lawyers have offered their clients the opportunity to use a Primary and Secondary Will. The practice has also recently been used in British Columbia. The purpose is to avoid the need to apply for a Certificate of Appointment of Estate Trustee for a Will (a Grant of Probate) that disposes of assets that do not require probate to effect a transfer and ultimate distribution to beneficiaries. The general purpose of the use of multiple Wills is to avoid the payment of the estate administration tax on the value of assets that can be transferred without probate.

The Ontario Superior Court of Justice has determined that such planning is a legitimate planning technique.

The classes of assets are generally known but on occasion an asset transferred under the Secondary Will may ultimately require probate. This would result in the need to apply for a certificate for the Secondary Will which then results in estate administration tax being levied on all assets. Examples of such assets include artwork and marine vehicles.

To avoid this, many practitioners use what is called a “basket clause” which places in the Primary Will all assets for which the Estate Trustees (Executors) determine probate is required.

In a recent decision, this planning technique has now come into question on the basis that the Trustees cannot possess what the Court believes is a discretion that can possibly result in a void Will. A void Will often requires the other Will to be probated, and could in certain situations interfere with the designated beneficiaries receiving their intended bequests.

The matter has been appealed and will be heard by the Divisional Court.

While certain practitioners are hopeful that the Court will overturn the decision, the results will not be known for many months. The Court may affirm or modify the ruling but leave the impact intact.

In the meantime, if you have multiple Wills that contain a basket clause, you should contact us to review the Wills and provide advice.

If you wish to discuss the matter or confirm that your Will is or is not affected, we would be pleased to assist.

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