If you own shares in a private corporation and you have one will, your estate is probably set up to pay a tax it doesn’t have to pay. The fix is one of the best-kept-in-plain-sight strategies in Ontario estate planning: two wills. It’s legal, court-tested, and routine among well-advised business owners — and skipped constantly, because most owners have never heard of it.
The problem: probate tax on your company
When you die, your executor usually needs a court-issued Certificate of Appointment of Estate Trustee — probate — to deal with your assets. Banks demand it. The land registry demands it. And Ontario charges for it: Estate Administration Tax of roughly 1.5% of the estate’s value ($15 per $1,000 above the first $50,000, which is exempt).
The tax applies to everything passing under the will submitted for probate. Your private corporation shares get swept in — even though no third party actually requires probate to transfer them. A bank won’t release your accounts without a certificate, but your own company’s share register is maintained by your own corporation. Probate adds nothing except tax.
On a business worth $3 million, that’s roughly $44,000 of estate administration tax paid for a court certificate nobody needed.
The solution: a primary will and a secondary will
The multiple wills strategy splits your estate in two.
The primary will covers assets that need probate: bank and investment accounts, real estate (with exceptions), vehicles, and anything a third-party institution won’t transfer without a certificate. Only this will goes to court, and estate administration tax is calculated only on these assets.
The secondary will covers assets that don’t need probate: your private corporation shares, shareholder loans owed to you by the company, partnership interests, and often personal effects and art. This will is never submitted for probate, and its assets never enter the tax calculation.
Ontario courts blessed the strategy in the late 1990s (the Granovsky decision), and it has been standard practice since. The savings scale with the business: at 1.5%, every additional million dollars of company value kept out of probate saves about $15,000.
Who should consider it
Two wills make sense for almost anyone holding significant assets that can transfer without probate — most commonly owners of incorporated businesses (including professional corporations: physicians, dentists, lawyers), holders of shareholder loans, and owners of significant private company investments. If you’ve incorporated your business — something we covered from the franchise and licensing angles — the secondary will is usually the logical next step.
It isn’t worth it for everyone. If your corporation is worth $100,000, the savings may not justify the added drafting cost and complexity. The math is simple; run it.
What can go wrong (and how to avoid it)
Multiple wills are powerful but unforgiving of sloppy drafting.
Revocation clauses that nuke each other. Each will must revoke only prior wills covering its assets. A standard “I revoke all prior wills” clause in the second-signed will can accidentally revoke the first. This is the classic multiple-wills drafting error.
Gaps and overlaps. Every asset must fall clearly under exactly one will. Assets caught by both — or neither — create exactly the litigation you were trying to avoid. Good drafting uses a basket clause and gives executors tools to allocate doubtful assets.
The wrong executors. The two wills can name different executors, but mismatched appointments create conflict. Most owners name the same people under both.
Corporate records that don’t match. The strategy assumes your minute book and share register are current. If your shareholdings are a mess — resolutions never signed, transfers never recorded — fix that now. It’s the same clean-up an eventual share sale would force anyway.
Life changes. Reorganizations, a new holdco, an estate freeze, selling the business — each can shift assets between wills. Review the pair after every corporate change.
The rest of the package
Two wills handle death. They do nothing for incapacity — that’s what powers of attorney for property and personal care are for. For business owners, the property POA matters doubly: someone needs authority to run or sell the company if you can’t. A complete owner’s plan is four documents — primary will, secondary will, and both POAs — drafted together so they mesh.
The bottom line
If you own a private corporation and have a single will, your estate plan is leaving real money on the table, often tens of thousands of dollars, for no benefit. A properly drafted primary/secondary will pair fixes that permanently, for a one-time drafting cost.
Incorporated and still carrying one will? Barbarian Law™ prepares multiple-will estate plans for business owners and professionals — wills, POAs, and the corporate records clean-up to match.
📞 Contact Barbarian Law to run the numbers on your estate.
This article is general information, not legal or tax advice. Rates current as of publication. Every situation is different — speak with a lawyer about yours.
