Multiple Wills in Ontario: How Business Owners Use a Secondary Will to Avoid Probate on Private Company Shares

For Ontario business owners, the shares they hold in a private corporation are often the most valuable asset in their estate — and under the traditional probate model, those shares would be counted in full when calculating the Estate Administration Tax. The tax can be substantial when a business is worth hundreds of thousands or millions of dollars.

Ontario's well-established multiple wills strategy addresses this directly. By splitting estate assets between two wills — one that goes through probate and one that does not — business owners can keep private company shares entirely out of the probated estate. The result can be a significant reduction in the EAT owed.

The Core Problem: Probate and Business Interests

When an executor applies for a Certificate of Appointment of Estate Trustee, the resulting certificate is the document that most institutions — banks, land registries, transfer agents — require before dealing with estate assets. The certificate essentially proves that the executor has legal authority.

For assets like real estate and bank accounts, third parties require the certificate before releasing or transferring the asset. That requirement is what makes probate necessary and what causes those asset values to be declared and taxed.

Private company shares are different. A private corporation is controlled by its shareholders, directors, and officers. A corporate resolution — signed by the executor — can often direct the corporation to take the actions needed to administer the estate without a probate certificate from the court. The corporation does not require external proof of authority in the same way a bank or land registry does.

How Multiple Wills Work

The multiple wills technique involves executing two separate testamentary documents:

The Primary Will (Probated)

The primary will covers assets that will require a probate certificate — typically:

• Real estate held in the deceased's name
• Bank and investment accounts held solely in the deceased's name
• Publicly traded securities held in the deceased's name
• Any other assets where a third party will demand proof of authority

The primary will goes through the court process. The estate trustee applies for the Certificate of Appointment, the EAT is calculated on the assets governed by the primary will, and the certificate is issued.

The Secondary Will (Not Probated)

The secondary will covers assets that can be administered without a probate certificate — most commonly:

• Shares in private corporations
• Loans or receivables owed to the deceased from private corporations
• Shareholder loans
• Potentially other assets where no third party will require a probate certificate (personal property, art, jewellery — but this requires careful analysis)

The secondary will is never submitted to the court for probate. The executor relies on the secondary will and the corporate records to deal with the private company assets. Because no probate certificate is obtained for these assets, they are not declared on the primary probate application and no EAT is paid on their value.

The Tax Saving: An Illustrative Example

Consider a business owner whose estate consists of:

• Family home (held jointly with spouse): passes by survivorship, no EAT
• Bank and investment accounts: $300,000
• Private company shares: $1,200,000

Without multiple wills, the $1,200,000 in private company shares would be included in the probate estate alongside the $300,000 in accounts. The EAT would be calculated on $1,500,000 of estate value (before any thresholds).

With a primary/secondary will structure:

• The primary will covers the $300,000 in accounts — EAT is calculated only on that amount.
• The secondary will covers the $1,200,000 in private company shares — no EAT applies.

The saving can be tens of thousands of dollars, depending on the current EAT rates (verify current rates with the Ministry of Finance).

Requirements and Risks

Multiple wills must be drafted with great care. Specific issues to address include:

Clear Division of Assets

The two wills must unambiguously specify which assets are governed by each. Overlap or ambiguity can lead to the secondary will being treated as revoking the primary will, or vice versa — with potentially disastrous results.

Non-Revocation Clause

Each will must confirm that it does not revoke the other. This is a fundamental technical requirement that distinguishes multiple wills from simply having two conflicting documents.

Confirming the Secondary Will Is Valid Without Probate

The executor and the corporation's lawyers must be satisfied that the corporate records and the secondary will together provide sufficient authority to administer the private company shares without court involvement. This depends on the corporate structure, the shareholders' agreement, and the relevant corporate law.

Tax Considerations Beyond EAT

The multiple wills strategy addresses the Estate Administration Tax. It does not eliminate income tax. The private company shares are still subject to a deemed disposition at death for income tax purposes. Proper tax planning around the business's underlying assets (goodwill, land, retained earnings) is a separate — and potentially larger — consideration.

Professional Drafting Is Non-Negotiable

Multiple wills are not suitable for a do-it-yourself approach. Errors in the drafting can cause the secondary will to be invalidated, or can create ambiguities that lead to litigation between beneficiaries. An estate lawyer experienced with business owner estates should draft and coordinate both documents.

Who Should Consider Multiple Wills?

Multiple wills are most relevant for:

• Shareholders in private corporations with significant value
• Individuals who hold shares in multiple private corporations
• Business owners where the EAT saving on private company shares justifies the additional planning cost

For individuals whose estate consists primarily of real estate, registered accounts, and publicly traded investments — with no private company interests — multiple wills are generally unnecessary.

Frequently asked questions