Secondary Corporate Wills in Ontario: How Dual Wills Shield Private Company Shares from the 1.5% Probate Tax

For incorporated business owners, real estate holding company shareholders, technology founders, and licensed professionals operating through Professional Corporations (physicians, dentists, accountants, and lawyers) in Ontario, a single standard Will contains a costly structural flaw: it drags your private corporate shares into the probate net, triggering an avoidable 1.5% Estate Administration Tax on the full fair market value of your business.

Through a well-established legal strategy known as Dual Wills (consisting of a Primary Will and a Secondary Corporate Will), Ontario shareholders can legally segregate assets that require a court grant of probate from private corporate assets that do not—saving tens of thousands of dollars in probate tax while accelerating business continuity.

1. How Ontario's Estate Administration Tax (Probate Tax) Is Calculated

In Ontario, when an Estate Trustee applies to the Superior Court of Justice for a Certificate of Appointment of Estate Trustee with a Will (commonly called probate), the estate must pay Estate Administration Tax under the Estate Administration Tax Act, 1998:

• First $50,000 of Estate Value: $0 (exempt since January 1, 2020).
• Every $1,000 (or part thereof) Above $50,000: $15 per $1,000 (1.5%).
• Mandatory Estate Information Return (EIR): Within 180 calendar days of receiving the probate certificate, the Estate Trustee must file a detailed Estate Information Return with the Ontario Ministry of Finance verifying the fair market value of every probated asset as of the date of death.

Crucially, if you have only one Will, and a single asset in your name—such as a personal bank account at a major bank or a parcel of real estate registered in the Land Titles system—requires probate to be liquidated or transferred, every asset governed by that Will is swept into the Estate Administration Tax calculation.

2. The Legal Foundation: Granovsky Estate v. Ontario (1998)

The validity of using multiple wills in Ontario was cemented by the landmark decision in Granovsky Estate v. Ontario (1998) and upheld in subsequent appellate jurisprudence. The court confirmed that an Ontario testator has the legal right to execute two separate, concurrent wills:

1. The Primary Will (Probated Estate): Governs assets where third-party institutions legally require a court-issued Certificate of Appointment before transferring title—such as personally held real estate, non-registered brokerage accounts, and bank accounts over institutional waiver thresholds.
2. The Secondary Will (Non-Probated Corporate Estate): Governs assets whose ownership can be transferred privately by the Estate Trustees without a court grant of probate—most notably shares, shareholder loans, and promissory notes in privately held Ontario (OBCA) or federal (CBCA) corporations, personal effects, jewellery, fine art, and certain family trust interests.

Because the board of directors of a private corporation can register a share transmission directly in the corporate minute book upon reviewing an original Secondary Will and a Death Certificate (without requiring a court probate certificate), the Secondary Will is never submitted to the Superior Court of Justice. No probate application on the Secondary Will means $0 in Estate Administration Tax on every asset inside the Secondary Estate.

3. Concrete Probate Tax Savings by Corporate Valuation

The table below illustrates the direct Estate Administration Tax savings achieved solely on the Secondary Corporate Will portion (assuming the first $50,000 exemption is already consumed by personal assets in the Primary Will):

4. Beyond the 1.5% Tax: Three Hidden Advantages of a Secondary Will

1. Avoiding Forced Formal Business Valuations & Ministry of Finance Audits

When private company shares are probated under a single Will, the Estate Trustee must report their exact date-of-death Fair Market Value on the Ontario Ministry of Finance's Estate Information Return within 180 days—and the Ministry has four years to audit and challenge that valuation. Obtaining a formal Chartered Business Valuator (CBV) report solely to satisfy probate tax auditors can easily cost $10,000 to $25,000+. Assets in a Secondary Will never appear on the Estate Information Return.

2. Preserving Corporate Privacy (No Public Court Filing)

Once a Primary Will is submitted to the Superior Court of Justice for probate, the Will and the declared value of the probated estate become public court records searchable by competitors, litigants, or curious third parties. A Secondary Will is never filed with the court, keeping your private corporate holdings, shareholder loan balances, and family succession structure completely confidential.

3. Zero Operational Freeze on Corporate Payroll and Contracts

Probate processing times in Toronto, Newmarket (York Region), Brampton, and Milton frequently stretch across several months. Because a Secondary Corporate Will takes legal effect immediately upon death without waiting for a court seal, your Corporate Estate Trustees can pass shareholder and director resolutions on day one to keep corporate bank accounts operating, sign commercial contracts, or execute a post-mortem tax pipeline or subsection 164(6) loss carry-back election within the strict First Graduated Rate Estate (GRE) tax window.

5. Drafting Precision: Avoiding the Milne Estate Pitfalls

Dual wills are technical legal instruments that cannot be safely generated with generic DIY templates. Following the Ontario Divisional Court litigation in Milne Estate (Re) (2019), careless drafting can accidentally invalidate a Primary or Secondary Will or cross-contaminate the two estates. At Maple Tree Law PC, our corporate estate drafting protocol safeguards your structure by ensuring:

• Definitive Basket Clauses Without Unfettered Executor Discretion: Clear, objective definitions of which assets belong to the Primary Estate versus the Secondary Estate so validity is never challenged under certainty-of-subject-matter rules.
• No Accidental Cross-Revocation: Custom revocation clauses ensuring the execution of the Secondary Will does not revoke the Primary Will signed minutes earlier.
• Tax & Debt Allocation Clauses: Precise allocation of capital gains tax (under section 70(5) of the Income Tax Act) and creditor liabilities so the Secondary Estate does not taint the Primary Estate.
• Corporate Minute Book & Shareholder Agreement Alignment: Reviewing restrictions on share transfers and unanimous shareholder agreements (USAs) so your Secondary Estate Trustees have clear authority to transmit shares.