This blog was written by Pius Omene, Estate and Trust Advisor at MD Private Trust Company which is part of Scotia Wealth Management
The multiple wills strategy is a popular approach recommended by estate planning experts –especially in Ontario and British Columbia where it received judicial approval – and particularly for those who own private company shares. The strategy has been extensively explored in previous blog posts and one of these posts alluded to potential probate-saving benefits for clients with expensive personal assets like artwork and classic cars. Most, if not all, of the previous posts focused on the probate-tax-saving benefit of the use of multiple wills.
There are risks associated with the use of a single will to deal with foreign assets. Multiple wills can be an effective tool for clients who own assets in multiple jurisdictions. For example, clients who are new to Canada may also hold foreign assets in their country of birth or previous residence.
Before deciding whether to prepare a will, it would be worth investigating the law in each of the jurisdictions in which property is held to determine if:
- one can bequeath assets in that jurisdiction by means of a will and if so, what are the formal requirements.
- there are mandatory succession rights.
Not all jurisdictions have straight-forward laws to guide the preparation of wills. Some of those jurisdictions that do have forced heirship rules that restrict what percentage of assets can be left by a testator to beneficiaries.
It’s worth noting that corporate executors may not accept an appointment that includes the administration of assets held in a foreign jurisdiction due to the associated regulatory and administrative risk. If a client intends to appoint a corporate executor, it’s important to thoroughly discuss the foreign assets. Advice from a lawyer in the foreign jurisdiction may be required.
If the client chooses to make one will to deal with assets in multiple jurisdictions, the client should be made aware of the potential for the following issues:
- Delays in administering the estate.
- Additional cost and delay to find and obtain assistance in each jurisdiction for an opinion on the will’s validity and recommendation for recognition of the will. Legal costs may include the need for an interpreter to relay the instructions and translate the legal opinion.
- Failure to execute certain gifts in the will if the jurisdictions where those assets are located don’t recognize either the will or the specific bequest.
It’s important for clients to seek legal advice in each of the jurisdictions where assets are held with a view to preparing separate wills in those jurisdictions. Care must also be taken to avoid the potential for accidental revocation of other wills when exploring this strategy.