How do multiple wills reduce the Estate Administration Tax owed on an Ontario estate?

A multiple-wills strategy splits your estate into two or more separate wills — typically one covering assets that require a certificate of appointment (probate) to transfer, like publicly traded investments and real estate, and a second covering assets an institution or corporation will accept without probate, such as shares in a private company, personal effects, or loans owed to you by a family business. Only the estate value covered by the will that actually goes through probate is used to calculate Ontario's Estate Administration Tax, so assets diverted into the second, unprobated will aren't included in that calculation at all.

This works because Ontario's Estate Administration Tax is charged on the value of the estate for which a certificate of appointment is sought, not automatically on everything you own, so property that never needs to pass through probate to be transferred can legitimately sit outside that number. It doesn't work for every asset; things like most real estate and many financial accounts genuinely need probate to be dealt with. Because getting the split right requires knowing exactly which assets a particular institution will transfer without a certificate, this needs a will drafted specifically with that structure in mind, not a do-it-yourself split of an existing will.