When is it better to have two wills rather than one?
The short answer is that everyone needs at least one Will, but let’s look at some other considerations:
- What about married couples or common-law spouses? Is it possible for two people to sign one Will?
- What about a person who owns shares in a privately held corporation?
With regard to the first question, it is possible for two people to sign one Will. This is called a Joint Will, says Vernon lawyer Rob Culos, of Culos & Co. Law.
“In my 32 years of legal practice I have done two or three because, given the unique circumstances of those clients, a Joint Will was the right fit. However, it’s not a good idea for most people,” Culos says. “If you and your partner have already signed a Joint Will, you should seriously consider revoking that document and signing Mirror Wills instead.”
As a member of the Wills, Estates and Trusts Okanagan subsection of the BC Branch of the Canadian Bar Association, Culos has met all Okanagan lawyers specializing in drafting Estate Plans, and the consensus is that Joint Wills cause more problems than they solve.
Making a Mirror Will
A better solution can be Mirror Wills – two separate documents that are “mirror images” of one another. That is, they usually follow the following pattern:
1. each person will appoint the spouse as the executor;
2. each person will name the spouse as the primary beneficiary; and
3. if there is no surviving spouse, third parties (often the couple’s children) will inherit.
“For those couples who have “his-and-hers kids,” there are ways to balance one’s duty to the spouse, and one’s desire to provide for one’s own children.”
1 Will + 1 Restricted Will
Any person who owns shares of significant asset value in a privately held corporation should definitely consider signing two wills instead of one, Culos says.
One Will would be their “normal” Will. The other, called the “Restricted Will,” deals only with the shares.
A Restricted Will does not have to be probated and the executor can allow the corporate shares to be transferred to the beneficiaries named in the Restricted Will without delay and without the payment of Probate Fees (a tax payable to the provincial government).
“Although at 1.4 per cent, the rate of Probate Fees is fairly low, you should ask why it should be paid when there is a perfectly legitimate alternative,” Culos says.
For example, if a person owns corporate shares worth $500,000, the Probate Fees would be $7,000. “The savings would certainly justify the cost of a second Will. Beyond that, the family business could be saved delay and uncertainty because the transition of ownership could take place much sooner than would be the case if it was necessary to obtain Letters Probate.”