While most people have one will to address how they would like their assets to be distributed upon their death, it is also possible to create multiple wills that do not revoke one another. In certain circumstances, the multiple wills strategy can be an effective tool for dealing with assets in different jurisdictions and/or reducing probate fees on assets that do not require a grant of probate to transfer, such as private company shares.
Probate is the process by which the court verifies that a will is valid under BC laws, and grants the executor the authority to administer the estate assets as directed by the will. When a will goes through probate, probate fees are payable by the estate on all assets passing through the will. These fees are equal to 0.6% of each $1,000 making up the gross value of the estate in excess of $25,000 up to $50,000 plus 1.4% of each $1,000 making up the gross value of the estate over $50,000. Therefore, approximately $1,400 is payable for every $100,000 of gross estate assets in excess of the first $50,000. If a will does not go through the probate process, probate fees are not payable on the assets.
Whether a will needs to be probated or not depends on the assets that are governed by the will. Land, for example, is not transferable after the death of the owner without a grant of probate from the Supreme Court of British Columbia. Financial assets such as investment accounts and bank accounts also usually require the will to be probated in order to transfer those assets to the ultimate beneficiary (unless the financial asset has a designated beneficiary named or a surviving joint tenant). However, assets such as furniture, jewelry and shares in a company do not need to go through probate to be transferred.
Therefore, multiple wills can be used as a way to avoid probate fees by creating a primary will to deal with all assets that need to be probated, such as land and investment accounts, and a secondary will to deal with all other assets that do not need to go through probate. This avoids having to pay probate fees on the assets passing through the secondary will, whereas if they were all dealt with under one will, probate fees would be payable on all.
- Reduced probate fees: the use of multiple wills allows will-makers who hold shares in private companies to transfer those shares to the executor without going through the probate process. This can result in considerable savings with respect to time and money.
- Privacy: probate is a public process, whereby a copy of the will is available for any member of the public to view for a nominal fee. Keeping the secondary will from going through probate keeps the will private, therefore, reducing the amount of sensitive information about the will-makers estate available to the public.
- Cost: multiple wills require very careful planning to ensure that one does not revoke each other. Furthermore, the drafter must ensure that assets are properly dealt with under each will. If just one asset in the secondary will cannot be transferred without probate, the entire secondary will must be probated, therefore defeating the entire purpose. Due to the necessity for careful planning and consultation with accountants, multiple wills take longer to draft and are therefore more expensive.
- Risk of wills variation claim: normally, once a will is given a grant of probate, an unhappy spouse or child has only 180 days to make a variation claim. When a will is not probated, that limitation period never begins to run, and therefore, a spouse or child can challenge the asset distribution under the will no matter how much time has passed.
- Additional executors: each will must have different executors and alternate executors. This is because under the Wills, Estates and Succession Act, an executor applying for a grant of probate must disclose all assets passing to him in his or her capacity as the deceased’s personal representative. Therefore, if the executor is the same for both wills, they will be required to disclose the assets passing to him or her under both wills and both wills will be probated. Finding appropriate executors can be difficult enough when there is only one will – having multiple wills may make that even more difficult. Furthermore, these executors will have to cooperate and work together in distributing the assets, so must get along.
- Use of trust companies: using a trust company as an executor may not be possible, as they may insist on probating the will. Should you want to appoint a trust company as an executor when using multiple wills, ensure that you receive their confirmation that they are comfortable proceeding without probate.
If you would like to learn more about the use of multiple wills and if the multiple will strategy could be right for you, please contact one of our lawyers practicing in the area of wills and estates.
Author: Jane Otterstrom
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250) 448-2637 or any of our lawyers practicing in the area of wills and estates at the following:Jennette Vopicka: firstname.lastname@example.org Danielle (Dani) Brito: email@example.com Jane Otterstrom: firstname.lastname@example.org