If structuring an estate plan across different Canadian jurisdictions didn’t raise enough considerations for an estate planner, add a different legal system to the mix, namely, Quebec’s civil law. This post focuses on the estate-planning advantages available to clients who hold assets both in Ontario and Quebec, specifically the advantage of probate planning using multiple wills.
In contrast to Ontario, which has four types of wills under Ontario’s Succession Law Reform Act, R.S.O. 1990, c. S.26, Quebec has three types of wills:
- Holographic wills, which are similar to Ontario holographic wills in that they are wills made in the handwriting of a testator with his or her signature;
- Wills before witnesses, which similar to Ontario’s attested wills in that such wills are signed by a testator in the presence of two witnesses; and
- Notarial wills, which do not resemble a will option in Ontario. Notarial wills are signed by a testator in the presence of a witness and a notary.
Notarial wills provide a planning opportunity to save probate fees in Ontario. Unlike holographic wills and wills before witnesses, notarial wills do not require probate. As my colleague, Corina Weigl, discussed in her previous post, “Leaving Quebec? Don’t Forget To Pack Your Notarial Will”, “Notarial Wills stem from the Quebec Civil Code. They are executed before a notary, who then registers the original with the provincial registry and stores the original as an officer of the court. The benefit of this process is that probate is not needed.” Probate is not required as the notary is viewed as an officer of the court and thereby able to authenticate a will.
Note that the lack of a probate requirement does not mean that a notarial will cannot be contested. The above noted process merely permits the liquidators (which is the term for executors in Quebec) to bypass bringing a motion to court for probate (which in Quebec essentially means a court decision supporting the authority that the will can be relied on by the liquidators to manage the estate).
The Planning Strategy: Multiple Wills
Simply put, the strategy is that, depending on clients’ particular circumstances, estate planners may consider multiple wills for clients who hold assets in both Quebec and Ontario. The Quebec will is designed to capture as many assets as possible, including assets that usually fall under secondary wills, such as shares held in privately held corporations. Estate planners then limit the assets that fall under an Ontario will to those which require probate to administer, such as real property in Ontario (or other provinces that require a grant of probate for the disposition of property) and possibly bank accounts and other investment interests situated in the province of Ontario for which probate is required. As the Ontario will deals with a defined set of assets, it is in effect a secondary will (under traditional “Ontario-only” probate planning).
With respect to registered accounts, such as a RRSP, it is important to seek advice from Quebec counsel as ultimately the appropriate planning is very fact specific. In Quebec, clients cannot designate beneficiaries of their registered accounts. An initial thought may be to designate beneficiaries under the Ontario will. However, such designations may not be recognized in Quebec. If this is the case, estate planners may consider including such accounts in the Quebec estate, since their inclusion in the Ontario estate may result in probate fees being payable.
- It is important to coordinate the definitions of primary and secondary (or Quebec and Ontario) estates with Quebec counsel (who presumably is drafting the Quebec will), so that there are no gaps that may result in partial intestacy.
- When referring to the Quebec will, Ontario estate planners may consider using proper terminology, such as referring to the liquidators rather than the executors of the Quebec estate.
- Ontario estate planners may consider reviewing their administrative provisions to ensure that all concepts in reference to the Quebec will and Quebec estate are in line with the Quebec will and civil law in Quebec. For example, if an estate planner includes a graduated rate estate provision, which provision discusses assets vesting in the executors (or rather liquidators) of the primary (i.e. Quebec) estate, such language may need to be revised because the civil system does not recognize the concept of an “estate” as such concept is recognized in Ontario. Rather, in Quebec, the assets effectively vest in the beneficiaries and the liquidator is really managing the assets and addressing liabilities on behalf of creditors.
Ultimately, an appropriate strategy for a particular client will depend on their particular circumstances and will require the advice of Quebec counsel.