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The advice every business owner eventually gets
If you own a private company in Ontario or British Columbia and you have sat down with an estates lawyer, you have been told to make two wills.
It is good advice. It is settled law, it is blessed on the province of Ontario’s own website, and it saves real money. For an estate holding a meaningful private company, the saving runs into tens of thousands of dollars.
There is a question that often does not get asked in that meeting, and it decides whether the structure helps or quietly gets in the way. Where do your beneficiaries live?
Because the secondary will is designed to hold exactly the assets you would least want a US person to inherit.
How the structure works, and why
Probate in Ontario is not a flat fee. The Estate Administration Tax charges nothing on the first $50,000 of an estate and $15 per $1,000 on everything above it, with the value rounded up to the nearest $1,000 and no cap at the top. Call it 1.5 percent of everything over $50,000.
An estate certificate is needed to prove an executor’s authority to a third party. A bank will want one. A land registry office will want one. But not every asset requires a third party’s cooperation to transfer. Shares in a private company where you controlled the board do not. Neither do shareholder loans owed to you by that company, declared but unpaid dividends, assets the corporation holds in trust for you, or personal effects and art.
So the plan splits. A primary will covers the assets that will need a certificate, and it goes to the court. A secondary will covers the assets that will not, and it never does. The wills are drafted so neither revokes the other.
Ontario endorses the mechanism explicitly. Where the court issues a Certificate of Appointment of Estate Trustee with a Will Limited to the Assets Referred to in the Will, only the assets in that will count toward the tax. The province publishes that on its own Estate Administration Tax page.
British Columbia works the same way, under the Probate Fee Act. Nothing on estates of $25,000 or less, $6 per $1,000 between $25,001 and $50,000, $14 per $1,000 above that, plus a $200 filing fee. On a family with a $1.5 million home, $2 million of private company shares and a $500,000 shareholder loan, one will produces roughly $56,000 in fees and two wills produce roughly $21,000. A $35,000 difference for some additional drafting.
The law behind it is settled, but it had a scare
This is worth knowing because clients sometimes hear a version of the story and come away nervous.
The strategy dates to Granovsky Estate v. Ontario in 1998, where the court held that assets governed by a secondary will did not have to be submitted for probate and no fees were payable on them.
In 2018, Re Milne Estate invalidated a pair of primary wills that used an allocation clause giving the trustees discretion to sort assets between the two documents. The reasoning was that a will is a trust and therefore needs certainty of subject matter. The estates bar reacted badly, and with reason, because that clause was in a great many wills.
A few months later, in Panda Estate, a different judge declined to follow Milne on materially identical facts. In January 2019 the Divisional Court overturned Milne unanimously, holding that a will is not a trust and does not require the three certainties.
Nothing has displaced that since. Multiple wills, including those with allocation clauses, remain valid in Ontario.
Where the border breaks it
Now the part that is rarely in the room.
The secondary will exists to hold private company shares, shareholder loans and corporate trust assets. Those are the most US-toxic assets a Canadian family owns, and the trouble compounds in three layers.
First, the company. A US person who holds 10 percent or more of the vote or value of a foreign corporation is a US shareholder for American tax purposes. When US shareholders together hold more than half, the company is a controlled foreign corporation. The consequence is an annual Form 5471, plus Subpart F and GILTI inclusions on income the company has not distributed. Your heir owes US tax on profits that are still sitting in the corporation. Canadian corporations are per se corporations under the US rules, which means they cannot be checked open or disregarded to make the problem go away.
Second, whatever the company holds. Canadian mutual funds and ETFs are passive foreign investment companies for a US person, each one requiring its own Form 8621. The default regime taxes gains at the highest marginal rate with a compounding interest charge on the deferral. The election that would fix this generally is not available, because Canadian funds do not issue the annual information statements it requires.
Third, the trust. If the will creates a testamentary trust and no US trustee exercises primary control over it, the trust is a foreign trust. Form 3520 for the beneficiary and Form 3520-A for the trust, with a penalty of the greater of US$10,000 or 35 percent of the gross reportable amount. Then the throwback rules, which tax accumulated income distributed later at the highest US rate with an interest charge on the years it sat there.
None of these are exotic. They are the ordinary consequences of a perfectly ordinary Canadian structure meeting a beneficiary with a US passport.
The number that actually decides the plan
Set the figures beside each other, because the comparison is the whole argument.
The Ontario probate saving is roughly 1.5 percent of the assets kept out of the certificate.
The US federal estate and gift tax exemption is US$15,000,000 per person for 2026, made permanent and indexed by the legislation signed in July 2025, with a top rate of 40 percent above it. For a married couple that is US$30,000,000 of shelter.
If the person making the will is a US citizen or green card holder, the United States taxes their worldwide estate. Every asset, on both sides of the border, in both wills. At that point the 1.5 percent is a rounding error against a 40 percent rate, and a structure built to optimize the small number can actively obstruct the planning that addresses the large one. Marital deduction drafting, a qualified domestic trust for a non-citizen spouse, credit shelter provisions and generation-skipping allocations all have to sit somewhere, and they do not fit neatly into a document designed to stay out of court.
Run it the other way and there is a second exposure. A Canadian who is not a US person but owns US situs assets faces a US estate tax exemption of US$60,000, not US$15,000,000, and a Form 706-NA filing obligation within nine months of death once that threshold is crossed.
Same family. Two entirely different regimes, decided by citizenship and residency rather than by anything in the will.
The executor question nobody asks either
While we are on things decided by where people live: who is your executor, and where do they live?
A US-resident executor of a Canadian estate will likely be required to post a foreign executor’s bond of up to twice the value of the estate’s assets, or petition the court to dispense with it, which is slow, expensive and not guaranteed. Canadian financial institutions frequently refuse to take instructions from a non-resident executor, which can strand estate investments at precisely the wrong moment.
It goes further than inconvenience. The CRA determines the residence of a trust or estate by central management and control. A sole US-resident executor can make the estate a non-resident trust, with filing and tax consequences in both countries. A qualified disability trust loses its status for the entire year if a non-resident acts as trustee even for a single day.
And the executor personally picks up an annual FBAR obligation for signature authority over Canadian estate accounts exceeding US$10,000 in aggregate. The penalties for missing it are US$10,000 per account for non-wilful failures.
What to do instead
None of this is an argument against multiple wills. The structure is sound and the savings are real. It is an argument for asking a different question first.
Start with where the beneficiaries are, and where they might plausibly be in twenty years. A child at university in Boston, a daughter who married an American, a son on a work visa in Austin who says the move is temporary. Any of these changes the analysis, and none of them shows up on a balance sheet.
Then decide which problem the plan is solving. If there is no US connection, optimize for probate and use the secondary will as designed. If there is one, the US estate tax and the corporate reporting regime come first, and the probate saving is something you collect afterwards if it still fits.
Consider where the US-exposed assets should sit. Sometimes the answer is that the private company shares should not pass to the US beneficiary at all, and that a trust structured with US advice, or a different allocation among children, solves more than any drafting inside the wills can.
And coordinate across borders. Two wills within Ontario is a probate strategy. A Canadian will plus a US situs will is a different instrument solving a different problem, and poorly coordinated cross-jurisdictional wills can revoke or interfere with each other’s provisions. Having two wills is not automatically better than one.
The structure is not the plan. The structure is what you build once you know who is receiving what, and which country is going to have an opinion about it.
Frequently Asked Questions
What is a secondary will and how does it save probate tax?
A secondary or limited will covers assets that can be transferred without a court-issued estate certificate, typically private company shares, shareholder loans and personal effects. Only the primary will is submitted for probate, so those assets are excluded from the value on which Estate Administration Tax is calculated. In Ontario that tax is $15 per $1,000 above $50,000, with no cap.
Are multiple wills still valid in Ontario?
Yes. The strategy was established in Granovsky Estate v. Ontario in 1998. Re Milne Estate briefly cast doubt on wills containing allocation clauses in 2018, but the Divisional Court overturned that decision unanimously in January 2019, holding that a will is not a trust. Multiple wills, including those with allocation clauses, remain valid.
What happens if a US citizen inherits shares in my Canadian company?
If they end up holding 10 percent or more of the vote or value, they become a US shareholder for American tax purposes, and if US shareholders together hold more than half, the company becomes a controlled foreign corporation. The result is an annual Form 5471 plus Subpart F and GILTI inclusions on undistributed corporate income. Canadian mutual funds or ETFs held inside the company are separately treated as PFICs, each requiring a Form 8621.
Can my American child be the executor of my Canadian will?
It is possible but often impractical. A non-resident executor may need to post a bond of up to twice the value of the estate assets, Canadian financial institutions frequently decline to act on instructions from one, and a sole US-resident executor can cause the estate to be treated as a non-resident trust because the CRA looks at central management and control. The executor also picks up a personal FBAR filing obligation for signature authority over Canadian accounts above US$10,000.
What is the US estate tax exemption in 2026?
US$15,000,000 per person, made permanent and indexed for inflation by legislation signed in July 2025, with a top rate of 40 percent above it. That figure applies to US citizens and green card holders on their worldwide estate. A Canadian who is not a US person but owns US situs assets faces an exemption of US$60,000 instead, with a Form 706-NA filing required within nine months of death once that threshold is exceeded.
Do multiple wills work in provinces other than Ontario and British Columbia?
The strategy only pays where probate fees are charged as a percentage of estate value and are uncapped, which is essentially Ontario and British Columbia. Alberta caps its fees, Manitoba abolished probate fees, and Quebec notarial wills require no probate at all, so in those jurisdictions there is little or nothing to save. A cross-border situs will is a separate question and can still be appropriate anywhere.
Sources
Government of Ontario, Estate Administration Tax. https://www.ontario.ca/page/estate-administration-tax
BC Laws, Probate Fee Act, SBC 1999 c. 4. https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/99004_01
Aird & Berlis, the use of multiple wills and Milne Estate (Re). https://www.airdberlis.com/insights/publications/publication/the-use-of-multiple-wills-and-milne-estate-(re)
BLG, Multiple Wills. https://www.blg.com/en/insights/2019/01/multiple-wills
Boughton Law, multiple wills in BC. https://www.boughtonlaw.com/2024/08/multiple-wills-in-bc/
The Globe and Mail, if your child lives in the US, it may be time to revise your will. https://www.theglobeandmail.com/investing/personal-finance/taxes/article-if-your-child-lives-in-the-us-it-may-be-time-to-revise-your-will/
Cardinal Point Wealth, cross-border bequests and planning for US beneficiaries of Canadian estates. https://cardinalpointwealth.com/2025/07/18/cross-border-bequests-planning-for-u-s-beneficiaries-of-canadian-estates/
Internal Revenue Service, Instructions for Form 5471. https://www.irs.gov/instructions/i5471
Internal Revenue Service, Instructions for Form 3520. https://www.irs.gov/instructions/i3520
Disclaimer
This article is for general informational purposes only and reflects conditions as of September 21, 2026. It is not investment, tax, or legal advice, and it does not account for your personal circumstances. Sartorial Wealth Inc. does not prepare tax returns. Please consult qualified professionals regarding your own situation.
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