Legal Estate Planning


David Rosenthal


February 28, 2019

February 28, 2019

‘Nothing is certain except death and taxes’ is a well-known and old adage. Wills are critical legal documents and very important for tax, estate and family planning. It is recommended that you review your wills at least every five years to ensure your wills reflect your changing life circumstances.

If you die and do not have a will, the Ontario Succession Law Reform Act dictates how your estate is distributed. Your spouse is entitled to the ‘preferential share’, which currently is the first $200,000 of the estate. If your estate is larger than $200,000 and you have children, then your spouse and children share the excess above the preferential share. The amount of such sharing depends on how many children you have.  

If you do not have a surviving spouse or children, your estate is distributed to your next-of-kin in a prescribed order, based on blood relationships. This may not be what you would wish, so it is important to have a properly drafted will.  

Typically, a will leaves the estate to your spouse. If your spouse predeceases you, then the proceeds go to your children. If you have minor children (less than 18 years old), your will should state who you wish to be the guardian of your children and their property until they become of legal age. You should speak with this person before adding them as your guardian in your will to confirm that they accept the responsibility. A will also identifies the estate trustee, the person who administers and distributes the estate. Typically the estate trustee is your spouse.

There are very specific requirements relating to wills.  To have a valid will you must sign it in the presence of two witnesses, both present at the same time, and they must also sign in your presence. The witnesses, or the spouse of a witness, should not be a beneficiary under the will. If they are then, the bequest to that witness, or to his or her spouse, is void.

If you have a will, it will be revoked by a subsequent marriage except where the will specifically declares that it is made in contemplation of marriage. In the event of divorce, the appointment of your spouse as an executor is revoked as is a bequest to your spouse of a beneficial interest in property. After a divorce, your will is treated as if your former spouse had predeceased you.

When a person dies their will is, in most cases, filed at the Ontario Superior Court of Justice as part of the ‘probate’ process. There is an estate administration tax, which is calculated on the total value of the deceased's estate wherever situated. That tax is about 1.5 percent of the assets you are required to declare to the government. If your estate is $3,000,000, the tax will be slightly less than $45,000.

However, not all assets are required to be included in the list of assets attracting estate administration tax. With only one will, most of your assets will have to be included in the government filing and you will pay the fees on the total of that amount. But, if you have two wills, one can deal exclusively with assets that must be probated and you will pay the tax on this amount only.  

The other will (often called a secondary will) can deal exclusively with assets where probate is not required. Shares of a dentistry professional corporation fall into this category. In the example above of a $3,000,000 estate, if the shares of your dentistry professional corporation are worth $2,000,000, then they can be dealt with in the secondary will. By doing so, the shares are excluded from the probate process and there is no estate administration tax on these assets. In this example, your estate will save $30,000 in estate administration tax.  Having a secondary will for your shares of your dentistry professional corporation can result in substantial tax savings.

Wills are an essential component to tax, estate and family planning. Such planning can take time and there are often many factors to consider.  

Do not delay. Time is not always on someone’s side.

David Rosenthal is a senior lawyer with Spiegel Rosenthal Professional Corporation whose practice is devoted to corporate, commercial and business law, with special emphasis on advising dentists.  He can be reached at (416) 865-0736 or e-mail to