When it comes to estate planning, most of us likely think of drafting a Will. And while a Will is an important part of the planning process, we recommend that individuals also consider preparing Powers of Attorney, Representation Agreements and Advance Directives. Having all of these documents as part of your estate plan will ensure you are prepared for whatever life may have in store for you. But what if you are also a business owner? What should you include as part of your estate plan? For many, it is completing a secondary Will, often referred to as a corporate Will.
Primary Will Secondary Will
• Executor **Must be a Different Executor
• Assets – non corporate Assets – typically companies
• Gifting plan Gifting plan. Often but not always the same
• Reference the secondary will Reference the primary will
• Probate and pay probate taxes No probate and hence no probate fees (tax)
The magic of this Will structure is twofold. One – there are no trust filings to do. Like a basic estate plan one does the plan and it is ready for use upon the passing of the Will-maker whether this occurs in the short term or years later.
Secondly, it has the advantage of providing privacy. A probate application is a public process. There is a filing with the registry that is accessible to anyone through a simple probate search. For corporate Wills there is no public filing. The corporate Will’s plan and the assets covered within it are not made public.
It is also important to note that a secondary Will provides a simple and cost-effective method to help the beneficiaries of the estate from having to pay the provincial tax that may be triggered by death. This tax is also known as probate fees.
Probate fees in BC on the assets of the estate:
- 0 – $25,000.00 NIL
- $25,000.00 to $50,000.00 .06% tax
- Amounts over $50,000.00 4% tax
- Goes to general revenues in Victoria.
The most recent version of our company act, the BC Business Corporations Act S.B.C. 2002, c. 57 allowed for possibility of transferring assets within a company without the need of a probate. This was tested in 2017 in Berkner (Estate), 2017 BCSC 619. The key paragraph of the decision reads as follows:
- [21] Turning to the legislation of this province, I find support for the applicant’s position that she be entitled to a grant of probate over what amounts to only a portion of the deceased’s estate can be found in s. 136 of the Wills, Estates and Succession Act, S.B.C. 2009, c. 13, which states:
- 136 A representation grant, whether or not power is reserved to another person to apply for a subsequent representation grant, gives to the personal representative exclusive authority to administer the estate or that part of the estate to which the representation grant applies in accordance with its terms. [Emphasis add]
- Per “Master Wilson”
As you can see, a secondary Will or Corporate Will is an important part of an estate plan. If you are a business owner and would like to begin your estate planning process, we would be pleased to assist. Please reach out to any member of our estate planning team.
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Timothy N. Grier Partner | Estate Planning and Litigation Lanley |
This article is intended to be an overview of the law and is for informational purposes only. Readers are cautioned that this article does not constitute legal or professional advice and should not be relied on as such. Rather, readers should obtain specific legal advice in relation to the issues they are facing.