New Court Ruling Could Invalidate Multiple Wills
January 24, 2019 – The decision in the Milne case that caused much concern among Estates and Wills lawyers has now been overturned on appeal by the Divisional Court. See the decision here. Unless appealed further, the practice of having primary and secondary wills, with the Trustees having discretion as to what to include in the primary would again be considered a valid method of estate planning.
A common estate planning tool used by lawyers for their clients is to have a client execute multiple wills, often a Primary Will and a Secondary Will. The reasons for doing so usually stem from saving the estate probate fees. When estate trustees wish to obtain the release of the deceased’s assets to the estate such as bank accounts or investments, some institutions will require a probated will before releasing the funds or property. Probate is a process where by a court will review the will and the supporting material to establish it as valid and binding. In Ontario, the government charges substantial fees based on the value of the estate being probated.
One solution is to create a secondary will to cover assets that are not required to be probated, such as shares in a private Canadian corporation. Since many people draft their wills many years before they pass away, some wills have been drafted to allow the estate trustees to determine which assets are to be included in the primary will depending on the need for probate. Obviously, the nature of the assets belonging to someone may change substantially between the date of the will, and the date of passing.
A recent decision of the Superior Court of Justice in Milne Estate (Re) has held that such clauses may invalidate the Primary Will. A Will is a form of a trust, and the law has always required a trust to have three certainties – certainty of intent to create the trust, certainty as to the object or recipients of the trust, and certainty of the subject matter or property committed to the trust. Justice Dunphy found that the effect of the clause described above created ambiguity and uncertainty as what the subject matter or property was covered in the Primary will, and therefore the entire will was invalid.
In that case, the Secondary Will was broad enough to encompass all of the estate – but if probate is required to obtain release of some of the assets to the estate – then estate fees are going to be payable on the entire estate, and the advantage of the secondary will disappears. This could be quite costly to the beneficiaries.
We understand the matter has been appealed to a higher court, until that is heard there will be great uncertainty regarding the validity of many wills that have been drafted this way, and many people who have used the multiple will scenario may wish to review their documents to see if there could be potential problems.
The Milne case highlights the fact that laws and interpretation of laws change over time, and what may be acceptable drafting at the time a will is created may become problematic later on. It is a good idea to regularly review one’s estate plan and documents with a lawyer to make sure final wishes are carried out as intended.