What Is A Corporate Will?
A corporate will (also known as secondary will) is a special tool for estate planning with respect to your business interest in a privately help company. A large driving factor for having a second will is to avoid the probate requirement and therefore the estate administration tax.
As an example, if you are a business owner, you can have two separate wills. One will would deal with personal assets and the other would deal with your corporate shares. Your personal will may need to be probated, while the corporate secondary will is designed specifically to avoid probate. This will allow you to transfer the shares legally to a new owner or to the beneficiary without being subject to the administrative tax (probate tax) which is calculated based on the fair market value of those shares at the time of death.
Things to keep in mind
Before swinging for the fences and going through the effort of drafting a corporate will, make sure you seek legal counsel to see if it is the right choice. While it may reduce some of the probate fees that your estate would be subjected to, it may not be a big enough reduction to make a difference. However, you may be able to include any real estate property owned in Ontario to the secondary will, and now it’s worth it. Avoid dying without a will.
Contact Hummingbird Lawyers today to see what your next estate planning step should be. The Wills & Estates team can sit down with you, crunch the numbers and see what your best course of action can be to protect your estate, your business assets and your loved ones.