Two Wills Kept a Kitchener Clinic Out of Probate

The situation

Genevieve co-owned a physiotherapy clinic in Kitchener with a business partner, Rivka. Each held half the shares in the corporation that ran the practice. Genevieve's spouse, Shira, worked as a pharmacist, and the two were raising two young children. Between the clinic shares, a shareholder loan Genevieve had made to the corporation to fund equipment, the family home, investment accounts, and life insurance, the couple's combined estate sat somewhere between $1,200,000 and $2,500,000 depending on how the clinic was valued in a given year.

Genevieve had a will from before she started the clinic, drafted when she was newly qualified and had almost no assets to speak of. It left everything to Shira, then to the children, in the ordinary way. It said nothing about the corporation, the shareholder loan, or what should happen to her shares if she died. She came to Treadstone Law after a colleague mentioned that business owners sometimes use more than one will, and she wanted to understand whether that applied to her.

What the review found

The review started with a basic but important question: which of Genevieve's assets would need probate, and which would not. Probate is the court process that confirms a will is valid and gives the estate trustee (the person who administers the estate) legal authority to deal with the deceased's assets. Ontario charges an estate administration tax, sometimes called a probate fee, calculated on the value of the estate that passes through probate — roughly 1.5 percent on the portion of an estate above a modest threshold. On an estate in Genevieve's range, that tax alone could run well into five figures.

Not every asset needs probate. Assets with a named beneficiary, like life insurance and registered accounts, generally bypass it. Assets held jointly with a right of survivorship usually bypass it too. But privately held corporate shares are different. A bank, land registry office, or title insurer dealing with real estate will often demand a probate certificate before releasing funds or transferring title, because they want the court's confirmation that the will is valid before relying on it. Many transfer agents and corporate record-keepers, by contrast, do not require probate to record a change in share ownership — the corporation's own directors and officers can accept a will as authority to transfer shares, without a court ever getting involved, provided the will gives them clear grounds to do so.

That gap is exactly what a two-will structure is built to use. Under Genevieve's single will, her clinic shares and the shareholder loan owing to her would have been swept into the same estate as her house and her investment accounts, and the whole estate would have gone through probate together, whether or not the shares actually needed it. The corporation's own bylaws did not require probate to transfer her shares to her estate trustee. That meant probate tax was being paid on assets that never needed a court's involvement at all.

What we did

1. Split the estate into two wills. A primary will was drafted to cover assets that genuinely required probate — principally the family home and any real property, along with any accounts held solely in Genevieve's name that a bank might insist on confirming through the court. A secondary will was drafted to cover the clinic shares and the shareholder loan, assets that the corporation's own governance did not require probate to transfer.
2. Confirmed the corporation's transfer rules before relying on them. Before finalizing the secondary will, we reviewed the corporation's constating documents and shareholder agreement with Genevieve and Rivka's corporate counsel to confirm that share transfers on death did not require a grant of probate under the company's own rules. This step matters — a two-will structure only works if the institution actually holding the asset will accept the secondary will without a probate certificate, and that has to be checked asset by asset, not assumed.
3. Drafted the wills to avoid inconsistency. The biggest risk in a two-will structure is the wills accidentally overlapping or contradicting each other — for example, both wills purporting to deal with the same asset, or a residue clause in one will accidentally sweeping in assets meant for the other. Each will was drafted to expressly exclude the assets covered by the other, with a clear description of which assets fell into which category, so an estate trustee reading them later would have no ambiguity about which will governed what.
4. Coordinated with the shareholder agreement. Genevieve and Rivka's shareholder agreement already contained a buy-sell arrangement funded partly by life insurance, meant to let the surviving owner buy out a deceased owner's shares rather than have an outside heir become a co-owner of the clinic. We reviewed the secondary will against that agreement to make sure the will's transfer mechanism did not conflict with the buyout obligation — the will needed to authorize the executor to complete the sale contemplated by the shareholder agreement, not simply hand the shares to Shira.
5. Named a compatible estate trustee for each will. Genevieve named Shira as her estate trustee under both wills, but the secondary will gave Shira explicit power to sell or transfer the clinic shares in accordance with the shareholder agreement, since Shira had no background in the clinic's operations and would need to work directly with Rivka and the corporation's accountant to complete the transaction.
6. Updated the general will's residue clause. The primary will's residue clause — the provision that catches anything not specifically addressed — was worded to apply only to assets not dealt with in the secondary will, closing off any argument that the two wills conflicted over which document controlled the clinic shares.

The outcome

The two-will structure was signed within a few weeks of the initial meeting. Because the clinic shares and shareholder loan, worth a meaningful share of the couple's overall estate, would no longer need to pass through probate, the family's expected estate administration tax dropped by an amount in the tens of thousands of dollars compared to the single-will structure Genevieve had before, based on the value of the shares at the time of planning.

The real test of a structure like this only comes when it is actually used, and estate plans are written to work whenever that day arrives, not on a schedule. What the engagement delivered in the meantime was certainty: Genevieve and Shira knew exactly which assets would need court involvement and which would not, Rivka's business had a clear mechanism to keep the clinic in the hands of someone who could run it, and the shareholder agreement's buyout arrangement had a will behind it that would not fight against it. The couple also update their wills again after their second child was born, a reminder that a two-will structure, like any estate plan, needs to be revisited as a family's assets and circumstances change — a new property, a change in the business, or a shift in who should act as estate trustee can all call for amendments to one or both wills.

What you can learn from this