NEW! Small Business Owners Can Now Save Big $$$ in Probate Fees
A Kelowna, BC judge has just established a legal precedent that could potentially save your estate thousands or even millions of dollars in probate fees.
As a common practice, planning experts have successfully used multiple wills to distribute estate assets across provinces to make it easier for executors to comply with local jurisdictions’ laws and regulations. As a reminder, you should have a will for each jurisdiction in which you hold real property. For example, if you have a recreational property in Palm Springs (Arizona), you should have a will for Arizona regarding that property upon your death. This will make dealing with that property at death much easier and potentially less expensive for your executors.
Multiple wills to separate assets in the same province
Since the passing of the 2014 Wills, Estates, and Succession Act in BC, though, experts have been promoting the use of multiple wills to separate assets within a single jurisdiction with greater confidence.
Some assets—like the death benefit of life insurance policies—are automatically transferred to their designated beneficiaries or co-owner upon death, without going through the estate. A will is not required, thereby protecting the transfer of assets from probate fees (1.4% in BC) and public disclosure.
Other assets require a will to affect the transfer of ownership. This asset group can be further broken down into those assets that require a court to legally confirm the validity of (or “probate”) the will and those that do not. The transfer of private company shares needs a will but does not require that it be probated.
On April 13, 2017, Kelowna-based Master Steven Wilson confirmed the previously untested strategy of using multiple wills in BC in the case of The Estate of Norman Frank Berkner. Master Wilson ruled that shares of the family business (Berkner Egg Farms Ltd.) fell under a secondary will, as per Mr. Berkner’s wishes.
We recommend business owners with substantial share values consider whether this approach is appropriate for their situation. There are certain complexities that are out of the scope of this blog post, so if you have questions about the applicability of this approach for your situation, call us.
One of our highly regarded preferred service providers, CV TrustCo, has recently published an excellent blog post about Probate Fee Planning that you can read for more insights on this topic.
Call us at 604-924 9152 to discuss whether your estate could benefit from this strategy.