Why at times Primary and Secondary Wills are Crucial

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Date: 09 Jun, 2022| Author: Fred Streiman

In late 2021, Justice Nicholson of the Ontario Superior Court released his decision in Greaves Estate vs. Ontario (Ministry of Finance). Mr. Greaves died far earlier than anyone had anticipated. At the time of his death, he controlled three corporations ( not listed on a stock exchange ) and they were the beneficiary of a number of life insurance policies. As a result of his death, the insurance policies death benefits were paid to the companies, the shares of which Mr. Greaves solely owned. The estate now had these insurance proceeds within its four corners and the question became what assets were to be declared when probate is sought. The larger the value of the estate the greater the estate administration tax that the Province of Ontario will levy. That tax roughly speaking is 1.5%. As we discussed earlier, that is a tax that is completely separate and apart from any federally levied income tax. There was much discussion and debate before the court and in the end, the court would not allow the executors of the estate the right to even seek an answer to the question as to whether or not the insurance policies and accordingly the value of the shares should be included for the purpose of calculating the estate administration tax.

The unspoken practical answer is that this never should have been a question. Properly drafted Primary and Secondary Wills would have lumped the shares in a privately held corporation in that portion of ones estate that does not require probate and as such is not subject to the estate administration tax. Just a little bit of estate planning would have gone a long way and would have saved both much money and aggravation in this situation.

Our office regularly prepares Primary and Secondary wills, often as part of a probate avoidance process we call the Full Monty. Details of the Full Monty can be found on our website.

To learn more check out the article – A Strategy To Reduce Or Eliminate Probate Fees – Fully Monty

To learn more check out the illustration – The Full Monty