Alternatives to Multiple Wills to Avoid EAT

Why is Estate Administration Tax an Issue?

  • Ontario estate administration tax ("EAT") is essentially equal to 1.5% of the value of the assets passing under probate (Estate Administration Tax Act, 1998)
  • Probate, or a Certificate of Appointment of Estate Trustee with a Will is generally required to transfer assets in Ontario following death of the owner
  • Real estate in the name of the deceased, always requires probate unless it is a first conveyance following conversion from Registry
  • Financial institutions generally require probate to transfer assets held in the name of the deceased

Multiple Wills Technique to Avoid EAT

  • The executor's authority is derived from the Will
  • Probate is only the evidence of that authority
  • Where the evidence is not required, assets may pass under the un‐probated Will
  • Examples include: shares in closely held private corporations, loans to closely held private corporations and family members, personal articles, real estate that was acquired under the old Registry system where it is a first conveyance after the conversion of the title to the Land Titles system

Multiple Wills Technique

  • The practice evolved where a testator would have one or more Wills such that assets not requiring probate could be distributed under a non‐probate Will
  • estate assets are not known until the testator dies
  • Accordingly, the drafting of multiple Wills became very creative, including the so called basket clause to make sure that every asset that did not require probate be allocated to the non‐probate Will
  • Re Milne, 2018 ONSC 4174, put this drafting technique in jeopardy threatening to invalidate multiple wills

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