By Ron Walsh.
It is increasingly common for business owners, particularly in B.C., to create one Will for their shares and shareholder loans and another Will for all other assets.
Why have a separate will for shares and shareholder loans?
The Will for shares and loans does not need to be probated which provides a number of benefits:
- Avoidance of probate fees on the value of the loans and the shares. In B.C., those fees are 1.4% of the value.
- There is no requirement to publicly disclose the value or the beneficiaries. A Will that is probated becomes part of the public record resulting in some loss of privacy. By avoiding probate, the second Will provides increased privacy.
- Simpler estate administration as the loans and shares can be transferred quickly to beneficiaries if desired, thereby minimizing uncertainty about ownership.
As with all estate planning, an individual’s objectives must be clearly understood in order to arrive at the most suitable plan including an assessment of the appropriateness of a multiple Will strategy for the individual.
For those who are 65 or older the use of an alter ego trust or a joint partner trust to own shares and/ or loans can often be an attractive alternative to a multiple Will strategy.
Timing for Reviewing Shareholder Estate Plans
All shareholders of private companies should review their estate plans whenever there is a major change in their personal or financial situation, but at least every five years.
Walsh King has significant experience assisting successful business owners and high net worth individuals in developing practical, appropriate and tax efficient estate plans. We would be happy to assist you. Contact us at your convenience.
Posted in Estate Planning + Strategic Insights
