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Ontario court overturns controversial multiple will decision

Tuesday, 5 February, 2019

Three judges of the Divisional Court of the Ontario Superior Court of Justice have overturned a controversial judgment relating to the use of multiple wills for probate planning. The latest ruling holds that a will is not a trust, and that the two primary wills are therefore valid (Milne Estate (Re), 2019 ONSC 579).

In the Ontario Superior Court of Justice’s original ruling (Milne Estate (Re), 2018 ONSC 4174), Justice Dunphy held that two primary wills could not be admitted to probate, because they did not “create a valid trust”, in that they lacked certainty of subject-matter committed to the trust: one of the three certainties required for a trust to be valid.

The use of multiple wills to reduce probate fees is increasingly common in Canada, and as such Dunphy’s judgment caused serious concerns for many practitioners, who were awaiting the result of the case’s appeal in the Divisional Court.

This decision was handed down on January 25, when a panel of three judges concluded that a will is not itself a trust under the Succession Law Reform Act, with Justice Marrocco saying that a will “is an instrument by which a person disposes of property upon death,” and that while a will may contain a trust, it is not itself a trust. As a result, the three necessary certainties to validate the trust are not applicable.

Further, the Divisional Court ruled that even if it were the case that a will is a trust, the subject-matter of the primary wills in question is in fact certain.

Marrocco said: “The property in the primary wills can be clearly identified because there is an objective basis to ascertain it; namely whether a grant of authority by a court of competent jurisdiction is required for transfer or realization of the property.  As a result, the executors can allocate all the deceased person’s property between the primary and secondary wills on an objective basis.”

Although the original ruling did not invalidate the drafting of multiple wills as an estate-planning device, law firm Miller Thomson comments that “the decision brings clarity to estate planners and their clients as it upholds the widely used practice of drafting wills with language that grants executors the power to allocate assets among multiple wills on an objective basis.”

Sources