FIVE Magazine YB - VOL2 | Page 18

can demand the security of the court order which confirms the authority of the estate trustees. In Ontario, a common method of avoiding unnecessary probate tax is the utilization of multiple Wills. This technique is based upon the preparation of two Wills for a single testator: the primary Will for those assets where probate will most certainly be required, and the secondary Will for those assets not requiring probate for their transfer. Depending on how the testator controls the corporation, and on the basis of a friendly board of directors, shares can be transferred without a court order, saving approximately 1.5% tax on the value of the shares. An additional benefit of multiple Will planning is privacy. Whereas Wills that go through court are a public document, the secondary Will, dealing with those assets that do not require probate, remains private. Estate Trustee Choosing the right person to be business owner’s estate trustee will be crucial to the successful administration of the estate. Generally speaking, the 18 yourBusiness estate trustee should have the necessary business knowledge to be able to deal with the business assets effectively. If the business is incorporated, the estate trustee will step into the shoes of the deceased owner to elect the directors who will run the corporation after the death of the business owner. If the business is specialized, and raises and sells beef cattle, it is important that the estate trustee has the necessary specialized knowledge. Although many individuals choose to name family members as estate trustees, it could be that a trust company would be the better choice. Trust companies’ entire focus is the administration of estates and trusts and they have the necessary in-house experience to manage complex business assets. Conclusion If you are a small business owner and you intend to transfer the business to your beneficiaries you should consider whether your current business format and estate planning will facilitate your intentions. You may want to incorporate, if you are incorporated you may Online | VOLUME 1 - ISSUE 2 want to reorganize to minimize tax consequences, you may want to prepare a secondary Will or even reconsider the qualifications and skill set of your estate trustee. Some of these changes may take some time to facilitate and may require the advice of both your accounting and legal advisors. Our advice would be to start the process early before disability or death maybe it difficult or impossible to complete. Upon completion you will find comfort in knowing that your beneficiaries have been properly provided for. n Michael Mumby is a corporate/commercial associate whose practice includes incorporation, professional corporations, corporate restructurings, shareholder agreements, mergers and acquisitions, leases and other commercial contracts, as well as institutional financing. Michael represents individuals, small businesses and private corporations. Cate Grainger is an estates lawyer in the Wills, Estates, Trusts and Charities Group of Harrison Pensa LLP. Her practice focuses on estate planning, estate administration, corporate succession strategies and not-for-profit law.