Dual Wills Explained: What Every CCPC Shareholder Should Know

For shareholders of Canadian Controlled Private Corporations (CCPCs), estate planning is more than just preparing for the future—it’s a strategic opportunity to reduce costs, streamline asset distribution, and protect business continuity. One increasingly popular method in Ontario is the use of dual wills, also known as primary and secondary wills, or personal and corporate wills.

What Are Dual Wills?

Dual wills are two separate legal documents used to govern different categories of assets upon death:

• Primary Will: Covers assets that typically require probate, such as real estate, bank accounts, and publicly held investments.

• Secondary Will: Covers assets that do not require probate, such as shares in a private corporation, certain personal effects, and real property qualifying for the “first dealings exemption.”

Why Use Dual Wills?

The main reason for using dual wills is to minimize probate tax. In Ontario, probate tax is calculated at approximately 1.5% of the value of assets that pass through probate. By separating non-probatable assets (like private company shares) into a secondary will, these assets can be transferred without incurring probate tax.

For example, if a shareholder owns $1 million in private company shares, placing those shares in a secondary will could save the estate roughly $15,000 in probate tax.

Key Benefits for CCPC Shareholders

1. Tax Savings
   Avoiding probate on private company shares can result in significant savings, especially for shareholders with substantial holdings.

2. Business Continuity
   Probate can be a lengthy process. By using a secondary will, shares can be transferred quickly, minimizing disruption to the business and ensuring smoother corporate succession.

3. Executor Expertise
   A secondary will allows the appointment of a separate executor with business acumen, ensuring that corporate assets are managed effectively.

4. Privacy
   Unlike a probated will, a secondary will remains private. This protects sensitive business information and beneficiary details from public disclosure.

5. Flexibility
   Dual wills can be tailored to include other non-probatable assets such as valuable personal effects, loans, or trust-held property, offering a more customized estate plan.

What Happens If There Is No Second Will?

If a shareholder of a CCPC only has a single will, all assets—including private company shares—will typically be subject to probate. This means the estate will pay probate tax on the full value of those shares, potentially costing thousands of dollars unnecessarily. Additionally, the probate process can delay the transfer of shares, which may disrupt business operations or create uncertainty for other shareholders and stakeholders. Without a secondary will, the estate also loses the opportunity to appoint a specialized executor for corporate matters, and sensitive business information may become part of the public record.

Is It Right for You?

While dual wills offer clear advantages, they must be carefully drafted to ensure they do not conflict with each other. Legal advice is essential to ensure both wills are valid, coordinated, and properly executed.

For CCPC shareholders in Ontario, dual wills are a powerful estate planning tool that can reduce costs, protect privacy, and ensure the smooth transition of business interests. If you’re a business owner or shareholder, speak with your legal advisor to explore whether this strategy fits your estate planning goals.