Photo of Matt TrottaBy Matt TrottaSeptember 22 2017
Tax & Estate Planning

Do I Need More Than One Will?

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Conventional wisdom indicates that one individual has one last will and testament where they dispose of all their worldly possessions. However, in recent years, personal asset ownership, families, and the laws surrounding them have been considerably more complex.

For instance, many people may own securities and property in multiple jurisdictions. For an example, a home in Alberta, a rental property in BC, a Canadian securities portfolio, US bank accounts, and a vacation property in California. With this in mind, it may be prudent to consider whether multiple wills are needed for assets in these various jurisdictions and whether one document can properly and efficiently handle the issues that may arise.

Having a will drafted in a jurisdiction where property is held can be very advantageous in the right circumstances as it allows for executors to administer different assets simultaneously with the knowledge that the document is drafted to consider specific issues in compliance with the law of that jurisdiction.

One method that has been employed by countries to address the issue of assets in multiple jurisdictions is the establishment of basic criteria necessary for a formal international will. Canada is a signatory to the 1972 UNIDROIT Convention Providing a Uniform Law on the Form of an International Will, along with fourteen other nations[1],with the Convention also being enacted into Alberta law. This Convention provides guidelines on the form of will that can be accepted in all signatory countries, and allows for a will valid in all signatory jurisdictions, regardless of variations in local requirements. All Canadian provinces except Quebec are signatories to this Convention. This means that a Canadian will has the ability to speak to assets outside of Canada in most situations.

The United States is a signatory as well, however while only fifteen US states have currently enacted this provision, every U.S. state and territory will recognize, probate, and enforce foreign wills in accordance with the laws of the jurisdiction where the will is executed[2].

A single Canadian will can be effective in addressing a person’s entire estate. However, there are cases where additional wills may be necessary. Some reasons for this may be efficiency, reduction of complications in probate procedures in other jurisdictions, a conflict of laws between jurisdictions, flexibility, or privacy issues. Additionally, international estates may trigger harsh double tax problems, as discussed in an earlier blog. These issues will need to be examined in further detail with your lawyer.

Another reason may be to reduce probate fees. In some provinces, probate fees are calculated based on a percentage of the value of the Estate. In British Columbia for example, these fees can rise to about 1.4% of the value of one’s estate. For a multi-million dollar estate, this amount can be in the tens of thousands of dollars.

Yet another concern may be whether or not an executor can properly act in each jurisdiction. This issue will be explored in more detail in a subsequent blog.

In all cases, multiple wills need to be very carefully and consistently drafted with attention both to the structure of each document, and the legal requirements in each jurisdiction. There are various issues that can arise if both wills are not prepared by a qualified practitioner in each jurisdiction since there is a much higher risk of drafting errors or conflicts between documents. Since both wills need to be amended in contemplation of the other, amendments due to changes in one’s life circumstances can be time consuming and costly if done incorrectly.

Where a person owns property outside of their jurisdiction of residence, it is always advisable to consult with a lawyer in the jurisdiction where that property is owned to confirm that the will in place can speak to that asset, or if an additional will is needed to address that property. 

Invitation for Discussion

If you would like to discuss this article in greater detail, or any other business law matter, please do not hesitate to contact one of the lawyers in the Tax & Estate Planning group at Shea Nerland LLP.

Disclaimer:

Note that the foregoing is for general discussion purposes only and should not be construed as legal advice to any one person or company. If the issues discussed herein affect you or your company, you are encouraged to seek proper legal advice.

[1] Australia, Belgium, Bosnia-Herzegovina, Croatia, Cyprus, Ecuador, France, Holy See, Italy, Laos, Libya, Niger, Portugal, Russian Federation, Sierra Leone, Slovenia, United Kingdom, and the United States of America as of January 19, 2015 (Source: http://www.unidroit.org/status-successions?id=1776, retrieved September 13, 2017)

[2] National Conference of Commissions on Uniform State Laws - Uniform Law Commission, “Why States Should Adopt UIWA,” http://www.uniformlaws.org/Narrative.aspx?title=Why%20States%20Should%20Adopt%20UIWA retrieved September 13, 2017

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