The problem: probate tax on everything
When an Ontario estate is probated, estate administration tax of roughly 1.5% applies to the value of all assets governed by the probated will — about $15,000 for every $1 million. But probate is only actually needed for certain assets: real estate, bank and investment accounts at institutions that demand it.
Private company shares, shareholder loans, personal effects and certain other assets can usually transfer without probate. Yet if they sit in the same will as your house, they get taxed with everything else.
The solution: two wills
A dual-will plan separates your estate. The Primary Will covers assets requiring probate; the Secondary Will covers assets that don't — typically private corporation shares and related loans. Only the Primary Will is submitted for probate, so estate administration tax is calculated only on the primary estate.
For an owner whose company is worth $2 million, that's roughly $30,000 in tax avoided — for the cost of some additional drafting. The structure has been accepted in Ontario since the Granovsky decision and is now standard planning for business owners.
Details that matter
The two wills must be drafted to work together: neither may revoke the other, executors' powers must be coordinated, and the allocation clauses must be precise about which assets fall where. Corporate records should be kept current so the estate trustee can transfer shares without institutional friction.
Dual wills sit inside a larger plan — powers of attorney, beneficiary designations, insurance and shareholder agreement provisions all need to point in the same direction.
Who should consider this
If you own shares of a private corporation, hold significant personal-use assets, or have shareholder loans owing to you, a dual-will structure deserves a serious look. The consultation to find out costs an hour; the structure routinely saves five figures.
About the Author
Nooruddin Waliani — Principal Lawyer & Founder
Nooruddin Waliani is the founder of Waliani Law, practising civil litigation, real estate, private lending, criminal defence, family law and estates across Ontario. Called to the Ontario Bar in 2015.