Recently an Ontario court handed down an important ruling in a case called Re Milne Estate, and it’s one that could impact the validity of your wills.
As part of their estate planning and with the help of a lawyer, Mr. and Mrs. Milne had each prepared both a primary will and a secondary will. This type of “dual will” is widely used in Ontario and is accepted by the courts as a legitimate way to help lessen probate fees and keep estate administration costs down.
The primary will lists the type of assets that require the Estate Courts to grant probate and conﬁrm the legal ownership of the assets of the deceased; this requires the court’s certiﬁcation so that the assets set out in the primary will can be dealt with.
The assets dealt with under a primary will might include real estate, publicly traded securities, bank accounts, life insurance policies, automobiles and other property. The purpose of the secondary will is to deal with assets that will not require an Estates Court’s certiﬁcation that they were legally owned by the deceased. Asserts typically covered by a secondary will usually include shares of a privately held company where the beneﬁciary knows that the shares were owned by the deceased, as well as jewellery, furniture and art work of the type that do not require the certiﬁcation of the Estates Court regarding legal ownership.
The focus of the Milne Estate case revolved on a “basket clause” that was contained in both the primary and secondary wills. This clause permitted the executors/trustees to use their discretion in dealing with the assets of the estate contained in both wills. This in turn raised questions around the validity of the wills in the ﬁrst place, due to the lack of precision around which of the two types of asserts were being dealt with. The judge stated that he had to decide whether “a will that grants the executors the discretion to determine what property is subject to the will [is] a valid will.”
The court decided that the clause failed “to describe with certainty” that property was the subject matter of either will. The judge ultimately decided that the secondary will was valid, and the primary will was invalid – meaning the provisions of the secondary will were to prevail and the primary will was of no effect.
This far-reaching decision could affect your existing primary and secondary wills and estate planning. If you have a primary and secondary will, I recommend that you speak to your lawyer to ensure the wording in your wills is not vague as was the judgment in the Milne case.