The Power of Two: Dual Wills in BC

THE CONCEPT

A dual will arrangement involves a will-maker executing two separate wills, including:

• the general (or “probate”) will, which governs assets that require a grant of probate before they can be administered (i.e., assets registered in the will-maker’s name that third parties will not transfer without a grant of probate, such as real property); and
• the restricted (or “non-probate”) will, which governs assets that do not require a grant of probate for their transfer (i.e., assets that third parties will transfer without a grant of probate, such as shares in a private company, unsecured debt, or certain personal belongings).

Dual wills operate concurrently, each dealing with a distinct class of property. The main benefits of implementing dual wills are:

• reduced probate fees – probate fees under the Probate Fee Act, S.B.C. 1999, c. 4, (roughly 1.4% of the gross value of the estate), will only apply to assets in the general will, excluding those in the restricted will (as long as probate is not sought for the restricted will); and
• preserving confidentiality – unlike the general will, the restricted will does not need to be filed in the public court registry.

LEGAL BASIS

While BC does not have statutory provisions explicitly governing dual wills, nothing in the Wills, Estates and Succession Act, S.B.C. 2009, c. 13 (“WESA”), prohibits their use. Further, Berkner (Estate), 2017 BCSC 619, held that section 136 of WESA contemplates that a grant of probate may be issued for only a portion of an estate, which supports the use of dual wills.

WHERE DUAL WILLS WORK

Dual wills are useful for will-makers who:

• own shares in private companies, where the company’s governing documents and directors allow for share transmissions without a grant of probate;
• hold certain loans, promissory notes, or partnership interests;
• have personal effects or art collections that can be transferred privately; and
• wish to minimize probate fees and disclosure of their assets, asset values, and asset distribution.

PRACTICAL CONSIDERATIONS

Implementing dual wills requires careful planning. Consider the following.

1. Consider whether assets may be classified as non-probate based on law, contract, and third parties’ practices.
2. The 180-day limitation period for wills variation claims under s. 61 of WESA begins only when a representation grant is issued, so if no grant is obtained for the restricted will, those assets may remain indefinitely open to wills variation claims.
3. The personal representative(s) appointed under the general will must be different from those appointed under the restricted will. It may be difficult for will-makers to come up with a suitable personal representative to administer the restricted will, particularly given the risks associated with the assets being indefinitely exposed to wills variation claims.
4. The restricted will’s prolonged exposure to wills variation claims may create uncertainty, complicate estate planning objectives, and delay final distributions. In contrast, probated assets benefit from greater certainty once statutory limitation periods have expired. For will-makers in blended families, where competing interests and the likelihood of disputes may be higher, uncertainty surrounding the timing and scope of potential wills variation claims may undermine the will-maker’s objective of achieving a timely and orderly administration and may outweigh the probate fee savings associated with dual wills.

If you have any questions about dual wills, please contact any member of our Wills, Estates + Trusts Group.