Multiple Wills as an Estate Planning Tool
It is a common estate planning practice for a testator to execute multiple wills, often referred to as primary and secondary wills. When utilizing multiple wills, estate assets that require probate are usually dealt with in the primary will, and assets that can be transferred to beneficiaries without probate are set out in a secondary will. This strategy can be advantageous for testators and their estates because it separates assets requiring probate from those that don’t, so that probate fees and administration taxes are only paid where necessary.
The legitimacy of using dual wills in this manner was first recognized in Ontario by Justice Greer in the case of Granovsky Estate v. Ontario[1], where the Court ruled that there was “no legislative prohibition”[2] against using multiple wills to avoid probate fees. In Granovsky, the deceased’s estate saved over $375,000 in taxes and fees by dividing assets under two separate wills.
However, while the multiple-wills-approach can be lucrative when properly implemented, individuals drafting dual wills must now be careful to clearly identify the estate assets that form the subject-matter of each will. This was the point of emphasis in the ONSC’s decision in Milne Estate (Re)[3] where the Court found a pair of primary wills were invalid for failing to specify the assets they purported to deal.
The judgment in Milne, barring appeal, may have a considerable impact on the way multiple wills are drafted and is an important reminder for testators and estate planners to ensure that the subject-matter of a will is “objectively identifiable”[4] from reading the document itself. The Milne decision also addresses the broad, inquisitorial role of the Court in the context of a probate proceeding.
Facts
John and Sheilah Milne both passed away on October 2, 2017, each leaving two identical Wills: a Primary Will and a Secondary Will, both dated May 10, 2016 and both naming the same executors.
The Primary Wills were intended to deal with estate assets that required probate and vested upon the executors: “all property owned by me at the time of my death EXCEPT … [certain named assets and] any other assets for which my Trustees determine a grant of authority by a court of competent jurisdiction is not required for a transfer or realization thereof” (emphasis added).
The Secondary Wills were intended to deal with estate assets that did not require probate and vested upon the executors: “all property owned by me at the time of my death INCLUDING … [certain named assets and] any other assets for which my Trustees determine a grant of authority by a court is not required for the transfer or realization thereof”.
The executors commenced two symmetrical probate applications for the Primary Wills of Mr. and Mrs. Milne. However, instead of granting probate the Court intervened, finding both Primary Wills to be invalid because they failed to identify their subject-matter with sufficient certainty.
Issues
In determining whether the Primary Wills should be admitted to probate, the issues before the court were two-fold: (a) whether issues arising out of the interpretation and construction of wills were properly before the Court in a probate proceeding and could form a barrier to probate being granted; and (b) whether the Primary Wills at issue in this case were invalid for lacking sufficient certainty as to their subject-matter.
The Nature of the Court’s Role in Probate Proceedings
The executors submitted that the issue of the Primary Wills’ uncertain subject-matter was not properly before the Court in the probate proceeding and that the probate function of the Court should be limited to the factual issues of whether a validly executed will exists and its contents. The executors proposed that any ambiguities that might arise regarding the property subject to the Primary Wills could be dealt with by a further application for directions.
The Court rejected this argument, finding that its role in probate proceedings was more expansive. Citing paras. 67-68 of the ONCA’s decision in Neuberger v. York[5], the Court in Milne found that issues of construction and interpretation of wills were properly before the Court in the probate context. The Court defined its role in probate as “inquisitorial”[6], stating that it was duty-bound to assess the will for validity where issues arose from the Court’s own ex facie examination of the will.
Certainty of Subject-mater
The Court prefaced its decision in Milne by stating that, as with any trust, a valid will must satisfy the ‘Three Certainties’: certainty of intention, certainty of subject-matter, and certainty of object.
Upon examining the Primary Wills in Milne, the Court flagged issues with certainty of subject-matter, raised by the ambiguous testamentary language used in the wills. The Primary Wills purported to deal with all estate assets, except for certain listed assets and any other assets which the executors determined did not require probate. In the Court’s view, this language did not identify the subject-matter of the Primary Wills with sufficient certainty.
The Court concluded that, because the Primary Wills failed to identify the property that would form the subject-matter of the wills, and instead left this to the sole discretion of the executors, the Primary Wills were invalid for uncertainty.
The Court found that a valid will must settle upon the executors assets that are “objectively identifiable”[7] on the date of death by reference to the will itself and the intention of the testator, and not left to the subsequent discretion of the executors. The Primary Wills failed in this regard.
Takeaways
While the Court’s decision in Milne may be appealed, the ruling could create issues for testators who had drafted multiple wills before this judgment, and failed to identify the subject-matter in each will with certainty. Going forward, individuals drafting primary and secondary wills should clearly identify the assets that are to form the subject-matter of each will, and not leave that decision to the discretion of trustees.
Generally, the ruling in Milne is a reminder that when drafting individual or multiple wills, it is important that the property that is to form the subject-matter of each will should be “ascertainable objectively”[8] from a reading of the will itself.
The judgment in Milne also confirms the extensive role of the Court in probate proceedings, which goes beyond adjudicating a dispute between parties, but includes examining the validity and language of the will, and potentially denying probate in circumstances where the Court’s own interpretation of the will’s language renders it invalid.
—
[1] [1998] O.J. No. 508
[2] Ibid para. 26
[3] Milne Estate (Re), 2018 ONSC 4174
[4] Ibid para. 23
[5] Neuberger Estate v. York, 2016 ONCA 191
[6] Milne para. 19
[7] Ibid para. 23
[8] Ibid para. 27
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Written by: Daniel Paperny
Posted on: September 24, 2018
Categories: Commentary
Multiple Wills as an Estate Planning Tool
It is a common estate planning practice for a testator to execute multiple wills, often referred to as primary and secondary wills. When utilizing multiple wills, estate assets that require probate are usually dealt with in the primary will, and assets that can be transferred to beneficiaries without probate are set out in a secondary will. This strategy can be advantageous for testators and their estates because it separates assets requiring probate from those that don’t, so that probate fees and administration taxes are only paid where necessary.
The legitimacy of using dual wills in this manner was first recognized in Ontario by Justice Greer in the case of Granovsky Estate v. Ontario[1], where the Court ruled that there was “no legislative prohibition”[2] against using multiple wills to avoid probate fees. In Granovsky, the deceased’s estate saved over $375,000 in taxes and fees by dividing assets under two separate wills.
However, while the multiple-wills-approach can be lucrative when properly implemented, individuals drafting dual wills must now be careful to clearly identify the estate assets that form the subject-matter of each will. This was the point of emphasis in the ONSC’s decision in Milne Estate (Re)[3] where the Court found a pair of primary wills were invalid for failing to specify the assets they purported to deal.
The judgment in Milne, barring appeal, may have a considerable impact on the way multiple wills are drafted and is an important reminder for testators and estate planners to ensure that the subject-matter of a will is “objectively identifiable”[4] from reading the document itself. The Milne decision also addresses the broad, inquisitorial role of the Court in the context of a probate proceeding.
Facts
John and Sheilah Milne both passed away on October 2, 2017, each leaving two identical Wills: a Primary Will and a Secondary Will, both dated May 10, 2016 and both naming the same executors.
The Primary Wills were intended to deal with estate assets that required probate and vested upon the executors: “all property owned by me at the time of my death EXCEPT … [certain named assets and] any other assets for which my Trustees determine a grant of authority by a court of competent jurisdiction is not required for a transfer or realization thereof” (emphasis added).
The Secondary Wills were intended to deal with estate assets that did not require probate and vested upon the executors: “all property owned by me at the time of my death INCLUDING … [certain named assets and] any other assets for which my Trustees determine a grant of authority by a court is not required for the transfer or realization thereof”.
The executors commenced two symmetrical probate applications for the Primary Wills of Mr. and Mrs. Milne. However, instead of granting probate the Court intervened, finding both Primary Wills to be invalid because they failed to identify their subject-matter with sufficient certainty.
Issues
In determining whether the Primary Wills should be admitted to probate, the issues before the court were two-fold: (a) whether issues arising out of the interpretation and construction of wills were properly before the Court in a probate proceeding and could form a barrier to probate being granted; and (b) whether the Primary Wills at issue in this case were invalid for lacking sufficient certainty as to their subject-matter.
The Nature of the Court’s Role in Probate Proceedings
The executors submitted that the issue of the Primary Wills’ uncertain subject-matter was not properly before the Court in the probate proceeding and that the probate function of the Court should be limited to the factual issues of whether a validly executed will exists and its contents. The executors proposed that any ambiguities that might arise regarding the property subject to the Primary Wills could be dealt with by a further application for directions.
The Court rejected this argument, finding that its role in probate proceedings was more expansive. Citing paras. 67-68 of the ONCA’s decision in Neuberger v. York[5], the Court in Milne found that issues of construction and interpretation of wills were properly before the Court in the probate context. The Court defined its role in probate as “inquisitorial”[6], stating that it was duty-bound to assess the will for validity where issues arose from the Court’s own ex facie examination of the will.
Certainty of Subject-mater
The Court prefaced its decision in Milne by stating that, as with any trust, a valid will must satisfy the ‘Three Certainties’: certainty of intention, certainty of subject-matter, and certainty of object.
Upon examining the Primary Wills in Milne, the Court flagged issues with certainty of subject-matter, raised by the ambiguous testamentary language used in the wills. The Primary Wills purported to deal with all estate assets, except for certain listed assets and any other assets which the executors determined did not require probate. In the Court’s view, this language did not identify the subject-matter of the Primary Wills with sufficient certainty.
The Court concluded that, because the Primary Wills failed to identify the property that would form the subject-matter of the wills, and instead left this to the sole discretion of the executors, the Primary Wills were invalid for uncertainty.
The Court found that a valid will must settle upon the executors assets that are “objectively identifiable”[7] on the date of death by reference to the will itself and the intention of the testator, and not left to the subsequent discretion of the executors. The Primary Wills failed in this regard.
Takeaways
While the Court’s decision in Milne may be appealed, the ruling could create issues for testators who had drafted multiple wills before this judgment, and failed to identify the subject-matter in each will with certainty. Going forward, individuals drafting primary and secondary wills should clearly identify the assets that are to form the subject-matter of each will, and not leave that decision to the discretion of trustees.
Generally, the ruling in Milne is a reminder that when drafting individual or multiple wills, it is important that the property that is to form the subject-matter of each will should be “ascertainable objectively”[8] from a reading of the will itself.
The judgment in Milne also confirms the extensive role of the Court in probate proceedings, which goes beyond adjudicating a dispute between parties, but includes examining the validity and language of the will, and potentially denying probate in circumstances where the Court’s own interpretation of the will’s language renders it invalid.
—
[1] [1998] O.J. No. 508
[2] Ibid para. 26
[3] Milne Estate (Re), 2018 ONSC 4174
[4] Ibid para. 23
[5] Neuberger Estate v. York, 2016 ONCA 191
[6] Milne para. 19
[7] Ibid para. 23
[8] Ibid para. 27
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