Did you know you can have more than one will in British Columbia? This is an estate planning tool that has been used for some time in Ontario, but it is not yet so well known here. I have been drafting these for my clients for a number of years, and now the BC Supreme Court has confirmed that if done properly, they are a valid way of facilitating the transfer of assets from one generation to the next. The case is Re: The Estate of Norman Frank Berkner, Deceased
The case is quite straight forward. Mr. Berkner was the owner of a valuable egg farm, which he had incorporated as Berkner Egg Farms Ltd. His wife had predeceased, and his only heir was his daughter, Shelley.
As part of his estate plan, Mr. Berkner had made two wills. One will (the “Primary Will”) was designed to include those of his assets which would require probate to be transferred, while the other will was designed to capture his other assets, including the shares of the company. Upon Mr. Berkner’s death, Shelley applied for probate of the Primary Will and renounced her appointment as executor under the second will. The result was that the second will had a different executor (an accountant) which, as you will see, is important for the two-will method to work.
The court, when presented with the Primary Will for probate, asked for submissions as to why Shelley should be granted probate of that will without also needing to probate the other will, or including the shares. The court posed the following three questions:
- Is a will maker permitted to make more than one will?
- Is a personal representative (ie, the executor) required to probate a will?
- If there is nothing to prevent a person from having more than one will, and nothing requiring an executor to probate a will, can the Primary Will be probated?
To answer the first question, the court pointed out that it is not uncommon for people with assets in multiple jurisdictions to have multiple wills, and pointed to two Ontario cases, each of which involved a person having two Ontario wills, only one of which was probated. The fact that this is done to avoid probate on the “non-probate” assets was recognized but was not commented on. The judge also mentioned a case going back to 1876 in England (yes, legal precedent goes back a long way!) and confirmed that it is permissible for a person to have more than one Will.
The answer to the second question confirms that there is no requirement that an executor must get probate of a will. In fact, the main reason an executor needs to get probate is to confirm the validity of a will and to confirm the executor’s authority to third parties (such as financial institutions). That means an executor of a “Secondary Will,” as it is referred to by this judge, does not need to apply for probate.
I mentioned above that it is important to have a different executor for each of the two wills. This is because the executor of the Primary Will must disclose to the probate court all assets that come to her because of the death of the deceased. If she is also the executor of the “Secondary Will” then she has to include the private company shares when she probates the Primary Will, which of course defeats the purpose of the Secondary Will.
Because the court confirmed that a person may have more than one will, and that a personal representative does not have to probate a will, that meant Shelley could get probate of the Primary Will without having to include the assets that fell to the Secondary Will.
The court looked at the Wills Estates and Succession Act (“WESA”) which specifically contemplates that only part of an estate may come to a personal representative. That implies that other parts of the estate may go to a different personal representative, who may not have to get probate for that part.
The Berkner case therefore confirms that multiple wills can work if done properly. Of course there are other considerations, such as the fact that if a will is not probated, the Wills Variation provisions of the WESA is never fully closed off.
If you decide to use multiple wills as part of your planning, you must make sure the wills are drafted carefully, appointing different executors for each will, with clear definitions as to what assets are to be dealt with under each of them. A mistake that results in an asset that ultimately needs probate going into the “non-probate” will can mean that probate will be needed for all of your assets.
Finally, you need to keep track of past planning, because a revocation of “all previous wills” in a subsequent Primary Will can also result in the non-probate will being inadvertently revoked.
That said, this is a marvelous planning tool for business owners and other who have substantial wealth in assets that do not require probate to be transferred. Add it to the bundle of tools such as tax-planned trusts, joint ownerships and beneficiary designations, and the amount of probate payable to the government when you die can be significantly reduced.