Wills

The foundation of the estate plan
Deals with the distribution of your property including, potentially, shares of your business
Is a fundamental estate planning tool for all types of business owners
For a business ultimately passing to children:
Will can gift shares to the children;
Can give shares to spousal trust - shares pass to children on spouse's death;
Can give shares directly to spouse - but what will he or she do with the shares?
Where shares of a business being sold on death:
Will generally won't mention shares specifically
Shares will be sold by estate - in many cases pursuant to shareholders agreement
Sale proceeds distributed under will

Probate

Serves as proof to financial institutions, financial advisors and the land registry office that your will has been certified by the court and that your executor is authorized to represent your estate
Executor still has power to act under your will before probate obtained
Need for probate depends on nature of assets
Called estate administration tax in Ontario
Tax = .5% of estate up to $50,000 of estate value + 1.5% on balance
Tax essentially equals $15,000 for every $1,000,000 of estate value
Ontario has Canada's highest probate fees
Only payable if will needs to be probated

Assets registered in joint names - automatically passes to the survivor(s) by right of survivorship
Real estate located outside the province of residence
Life insurance and in most provinces RRSP/RRIF holdings with named beneficiary (other than your estate)
Shares held in a separate will
Ontario court case allows private corporation shares to be transferred under separate will free of probate fees
Each person owning shares of a private corporation should consider having separate will just for shares
Strategy recommended where shares passing to next generation or where they are sold to outside party
Low risk strategy

We have provided valuable Information Required to Plan your Will. (Click here to download the pdf.)

For more information contact: Clinton Rayfield