There are situations where creating more than one will can be appropriate for an effective estate plan. Below are two common examples.
Assets in multiple jurisdictions
One situation is where individuals hold assets in multiple jurisdictions. For example, an individual lives in British Columbia and has assets in British Columbia, but also has a vacation property in California. Each jurisdiction holds a different set of rules that govern wills and estates, and the set-up of a will in one jurisdiction may not adequately address the rules in place within the other jurisdiction. To ensure the individual has the most effective estate plan possible, he or she should seek legal advice in both jurisdictions and put his or her professional advisors in contact with one another to collaborate and provide joint recommendations. A common recommendation is for individuals to set up multiple wills. One will in place to govern assets and liabilities within one jurisdiction, and the other set-up to govern assets and liabilities within the other jurisdiction. That way, on the individual’s death, each will is enacted and can be used appropriately to address assets within the jurisdiction it was made. The administration of each will can be carried out at the same time, which expedites the overall process.
Private company interests
Another situation is where individuals hold significant value within private companies in British Columbia. On death, if the individual personally holds financial accounts or real estate, both of which will likely trigger probate, then through the probate application process the Executor will be required to disclose the financial accounts, real estate AND the private company interests. The assets would be valued as at date of death with probate fees payable to the Province at approximately 1.4% of the value. Accordingly, if the private company interests have significant value then probate fees could be expensive. In those situations, there is a way to carve out the private company interests into a separate Will so that the private company interests bypass probate and probate fees. The set up would look something like this:
- Will #1 is established with Executor #1 acting to administer all assets of the Will Maker with the exception of the Will Maker’s private company shares and shareholder loans;
- Will #2 is then established with Executor #2 acting (must be a different person from Executor #1) to administer the Will Maker’s private company shares and shareholder loans;
- On the Will Maker’s death, if there are financial accounts or real estate governed by Will #1, then probate will likely be required. Executor #1 must disclose on the probate application all assets of the estate that will pass through Executor #1’s hands with values calculated as at date of death and probate fees payable on that value at 1.4%;
- As the private company shares and shareholder loans will not pass through the hands of Executor #1 (because they are passing through the hands of Executor #2 under Will #2), he or she need not disclose them for probate and need not pay probate fees on the value.
- Executor #2 can proceed to administer the private company shares and shareholder loans without the need for probate, as our Business Corporations Act in British Columbia permits succession of these interests with the presence of a non-probated Will.
If you have any questions or are looking for guidance around creating a will or having multiple wills, please reach out to a member of our Estates & Trusts group.