Pay Zero Probate Tax on your Corporation

Barry Fish

Doctors, dentists, pharmacists, landscapers, lawyers, landlords, tradesmen, store owners and many other persons operate their businesses and professions through a corporation. Over many years, the real estate owned by the company, the retained earnings and generally, the value of the company itself increases to the point where these corporate assets become a significant part of the person’s estate.

Over many years, the real estate owned by the company, the retained earnings and generally, the value of the company itself increases to the point where these corporate assets become a significant part of the person’s estate.

However it may not be necessary to pay the the probate tax on the assets owned by your corporation. In order to bring the probate tax on your corporately owned assets to zero, what you must do is to prepare two wills. Most people are not aware that Ontario estate law allows for multiple wills which cover different assets. We often refer to these as primary and secondary wills. The primary will resembles the normal type of will which we prepare, except that we use specific, precise wording to define your estate as EXCLUDING certain assets. The excluded assets are specifically described and listed and will typically include all of your corporations and the household assets as well. If you are holding physical gold or jewellery, they can also be listed as excluded assets. The secondary will, which relates to the property excluded from your primary will, has wording which differs from the primary will, and defines your estate as consisting of the assets which were excluded in your primary will. This secondary will, which describes your corporations and your personal effects will not be probated and will not be subject to probate tax. However, it will otherwise operate in the same way as your primary will. If the wording is not precise, however, your estate may not realize that there is a deficiency until the primary will is brought to probate, and of course by then, it will be too late to make corrections. In our law firm, we are very much aware of the pitfalls that can trap an amateur who attempts this type of will drafting. Our firm does many primary and secondary wills.

Upon your decease, where you have organized with primary and secondary wills, your estate will be able to deal with your corporate assets without having to wait for probate and without having to pay the Estate Administration Tax (probate tax) on these corporate assets. It should be remembered that once your household items and other personal effects are listed as excluded assets in your secondary will, your estate will not have to pay probate tax on them either.

I am the head of the Thornhill law firm of Fish & Associates and have been in practice since 1973.

My firm has been featured in the Toronto Star, National Post and the Globe and Mail.

I am the co-author of four books on the topic of wills and estates. My books have been featured in media across North America, including CNN, Time Magazine and the New York Times.

My law firm is pleased to offer a free will consultation for those who may not have a will and are not sure where to start.

Please visit our website willappointment.com for more information. We are located at 7951 Yonge Street, Thornhill, Ontario. Yonge Street (south of Highway 7), and our phone number is (905) 881 -1500.

If you have questions on primary and secondary wills.
My email is bfish@fishlaw.ca.