Secondary Will Ontario: How Dual Wills Reduce Probate Tax on Business Assets

If the deceased owned shares in a private corporation, an interest in a partnership, or valuable personal property that does not require a court certificate to transfer, a secondary will can mean the difference between paying tens of thousands of dollars in Estate Administration Tax or paying nothing at all on those assets.

The secondary will — sometimes called a dual will — is one of the most effective and legally settled probate-reduction strategies available to Ontario residents. It does not involve offshore structures or aggressive tax planning. It works because Ontario's EAT is calculated only on the value of assets that require a Certificate of Appointment of Estate Trustee to transfer. Assets that can be transferred without court intervention do not need to go through probate at all — and therefore do not attract EAT.

The Core Concept: Assets That Do Not Need Probate

The Estate Administration Tax is a provincial levy on the value of the estate going through probate. Not all assets require probate to transfer. The mechanism of the secondary will is to deliberately separate the deceased's assets into two categories:

Category 1 — Assets requiring probate (primary will):

• Ontario real estate held in the deceased's name alone or as tenants in common
• Bank accounts and investments held solely in the deceased's name where the financial institution requires a Certificate of Appointment
• Assets where a third party (land registry, financial institution) will only accept a court-issued Certificate as authority

Category 2 — Assets not requiring probate (secondary will):

• Shares in private corporations where the directors or shareholders can transfer the shares without court authority
• Shareholder loans owed to the deceased by a private company
• Partnership interests
• Tangible personal property (jewelry, artwork, vehicles, household contents) that does not require registration
• Loans owing to the deceased from family members or private arrangements

The secondary will governs only the Category 2 assets. Because no Certificate of Appointment is obtained for those assets, no EAT is paid on their value.

Why Private Company Shares Are the Main Target

For Ontario residents with substantial wealth, the most common application of the dual will strategy involves private company shares. The value of a controlling stake in a family business or a holding company can run into the millions. At $15 per $1,000 over $50,000, the EAT on a $3,000,000 private company stake would be approximately $44,250 — paid in a bank draft before the court even processes the application.

Under a dual will structure, the secondary will governs those shares. The executor of the secondary will — typically the same person as the primary executor — transfers the shares according to the secondary will's instructions without going to court. No Certificate, no EAT.

The Canada Revenue Agency does not treat this as tax avoidance. The EAT is a provincial court fee, not an income tax. Ontario courts have upheld dual will structures as a legally valid and effective estate planning tool for decades.

Drafting Requirements: What Makes a Valid Secondary Will

A secondary will must:

• Be executed with the same formalities as a primary will (signed by the testator in the presence of two witnesses, who also sign)
• Clearly identify which assets it governs — typically through a specific description ("all shares owned by me in any private corporation at the date of my death") rather than a list of individual companies
• Address who serves as executor of the secondary will (usually but not always the same person as the primary executor)
• Contain a clause that explicitly states it does not revoke the primary will — failing to include this can result in the secondary will inadvertently revoking the first
• Be executed on or after the date of the primary will (if the testator has an existing primary will, the secondary will typically follows)

The two wills must be carefully coordinated so that together they dispose of all assets, with no gaps or overlaps between them. Gaps create assets that fall outside both wills — requiring an intestacy application. Overlaps create contradictions that may require court interpretation.

The Executor's Practical Obligations Under Dual Wills

When a person with dual wills dies, the executor goes to court to obtain a Certificate of Appointment for the primary will only. The application to court lists only the assets governed by the primary will. Those assets form the basis for the EAT calculation.

The secondary will is administered separately, without any court application. The executor acts on the authority of the secondary will itself — presenting the document to the private company's directors or shareholders and transferring the shares according to its terms. Some private company articles of incorporation have specific provisions governing how share transfers on death are handled; the executor needs to review these alongside the secondary will.

The executor is still responsible for tax obligations arising from both sets of assets. The GRE designation, T3 returns, and CRA Clearance Certificate obligations cover all estate assets — not just those going through the primary will. Keeping the assets separate for probate purposes does not separate them for income tax purposes.

When Dual Wills Do Not Help

The dual will strategy is most valuable for estates with significant private company holdings or high-value personal property not requiring registration. For an estate consisting primarily of:

• Real estate (must go through probate)
• Bank accounts and publicly traded investments (financial institutions typically require a Certificate)
• Jointly held assets with right of survivorship (bypass probate entirely regardless of wills)
• RRSP/RRIF/TFSA with named living beneficiaries (bypass the estate entirely)

...a secondary will may add complexity without producing meaningful EAT savings.

The primary will optimization for most Ontario families is not a secondary will — it is ensuring that as many assets as possible have named beneficiary designations or are held in joint tenancy with the surviving spouse. Those strategies reduce probate exposure without requiring separate will documents.

The First Dealings Exemption: A Related Concept

One further probate-reduction strategy worth knowing alongside the dual will: the First Dealings Exemption for Ontario real estate. If a property was converted from the old Registry Act system to the Land Titles system in the 1990s and has never been transferred, mortgaged, or otherwise dealt with since that conversion, the executor may be able to transfer the property without a Certificate of Appointment — potentially avoiding EAT on a high-value family home.

Whether this exemption applies requires a title search through a real estate lawyer. It is not visible from the property's assessed value or municipal records alone.

The Ontario Probate Process Guide covers both the dual will strategy and the First Dealings Exemption in practical terms, including what to look for in an existing will, how to determine whether private company shares are covered, and how to calculate the EAT savings of each approach. Understanding which assets genuinely need to go through probate — and which do not — is the most consequential planning decision an Ontario estate faces.

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