All About Estates


In my first blog on multiple wills, I briefly discussed the rationale for using multiple wills as a tool for managing estate administration tax and then turned to drafting considerations, specifically the introductory clause and the revocation clause. In this blog I will focus on provisions where there is potential for an unintended double payment.

The potential for double payment arises in the context of multiple wills where the executors may need to access the assets of both the Primary and Secondary Estates (as in my prior blog I am using “Primary Will” to refer to the will that is probated and “Secondary Will” to refer to the will that is not probated, and “Primary Estate” and “Secondary Estate” have a corresponding meaning) to satisfy a payment or set aside a specific amount in trust, and accordingly a direction to make the payment or set aside the amount appears in both wills. The common example is the direction to pay the debts of the deceased and the expenses of administration. A direction to pay debts and expenses will appear in both the Primary and Secondary Will so that the executors have sufficient flexibility to access the assets of both estates. To avoid a double payment, the standard debts clause will typically contain additional provisions such as: (1) a statement that a similar provision appears in the other will; (2) a statement that it is not the testator’s intention that the debts and expenses be paid more than once; and (3) a discretionary power for the executors to determine how the debts and expenses will be allocated between the Primary and Secondary Estates.

A second area where there is a potential for double payment is in the context of legacies (including where a specific amount is set aside and held in trust as a fund). There are two common approaches for addressing this issue. The first is similar to the strategy for avoiding double payment of debts and expenses. That is to say, the direction to pay a legacy is included in both the Primary and Secondary Wills but the direction goes on to say that the legacies appear in both wills, they are not to be paid twice, and the executors have a discretion to determine how the payment will be allocated between the two estates. Another strategy is to include the direction to pay the legacies in the Primary Will only and include a “deficiency” provision in the Secondary Will. The provision in the Secondary Will incorporates the legacy in the Primary Will by reference to the extent the assets of the Primary Will are insufficient to satisfy the legacy, and authorizes the executors of the Secondary Estate to use the assets of the Secondary Estate to make up any deficiency. Of course, where there is little risk that the assets of a particular estate will be insufficient to pay the legacy, the legacy could be included in only one will. For example, if the substantial majority of the testator’s wealth is held through private companies governed by the Secondary Will it may be clear that the Secondary Estate will be sufficient to satisfy the legacy. In that case, the legacy could be included in the Secondary Will only. If there is any doubt, however, it is prudent to provide flexibility to access both estates. In addition to the particular doubling up risk in the context of multiple wills, it is also important not to forget the “normal” doubling up issues with legacies, for example where spouses make mirror wills and intend a legacy to be paid once only on the second of them to die, which I discussed in a previous blog.

A third provision where there is a potential for double payment is the executor compensation clause. The risk of double payment is particular evident where the will departs from the standard percentage guidelines and directs compensation to be paid at an hourly rate, or where the will provides the executors with a fixed monthly or annual amount. Where there is potential for confusion or uncertainty, including a clear statement of the testator’s intention is a good idea. To avoid doubling up on compensation, similar provisions can be included to those described above in the context of debts and expenses. Compensation agreements should also be reviewed to ensure that they will not result in an unintended double payment.

Generally speaking, then, it is important to be aware of the doubling up problem any time there is a direction to make a payment or set aside a specific amount in trust, the executors are to have access to the assets of both estates to satisfy the direction, and it is not intended that the direction be satisfied more than once.

To be continued…

About Darren Lund
Darren Lund is a member of the Trust, Wills, Estates and Charities at Fasken, Toronto office. Darren has expertise in a broad range of estate planning matters, including multiple wills, inter vivos trusts, disability planning, estate freezing, and planning for beneficiaries and assets outside Canada. Darren advises trustees and beneficiaries on all aspects of estate administration, both contentious and non-contentious, and his experience includes passing of fiduciary accounts, trust variations, post-mortem tax planning, and administering the Canadian estates of non-residents. He also speaks and writes on a variety of related topics such as estate planning for spouses and couples, inheriting overseas property and estate planning for persons with disabilities. He previously practised estates law at a large national law firm. Email: