If you own a business in British Columbia, your estate plan might be missing a powerful tool: a Corporate Will. Most business owners understand the importance of having a general Will in place, but few know that having two Wills can be a smart financial move.
A Corporate Will is a legal planning strategy that can significantly reduce the probate fees your estate will pay after you pass away. Here’s how it works, and why more business owners are taking this approach to protect their legacy.
The Basics: What Is a Corporate Will?
In B.C., probate fees are charged at approximately 1.4% of the value of all assets listed in the probate application. These fees are essentially a tax your estate pays to have your Will legally recognized and processed.
A Corporate Will allows you to separate your business interests, such as shares in a private corporation, from your personal estate. This separation can be key, since in many cases, private companies in B.C. don’t require probate to transfer corporate interests to heirs. That means those assets don’t need to be listed on the probate application, and as a result, no probate fee is payable on their value.
By using a Corporate Will for your business interests and a General Will for the rest of your estate, you can help your beneficiaries avoid unnecessary probate fees while still ensuring your wishes are followed.
What Does a Corporate Will Cover?
A Corporate Will typically deals with:
- Shares or interests in privately held corporations (not public companies)
- Some personal items that don’t require probate, such as household goods or keepsakes (but not vehicles)
It does not replace a general Will; instead, it works alongside it. Your General Will would still cover assets like your home, bank accounts, insurance policies, and other personal matters such as guardianship of minor children or funeral wishes.
Why Two Wills?
Having two Wills may sound complicated, but when done properly, it creates a clear and efficient estate plan. The key is to ensure both documents are carefully drafted to avoid overlap or contradictions. They should work in harmony, not cancel each other out.
Another important detail? The executors. With this strategy, each Will should appoint a different executor. This separation means the executor of your General Will does not need to declare the business assets on the probate application. This is where the savings happen — by avoiding probate on the business side, you preserve more value for your heirs.
Is a Corporate Will Right for You?
If you live in BC and are a shareholder in a private company, this is a strategy worth exploring. Corporate Wills are especially beneficial for:
- Family businesses
- Professional corporations (such as doctors, dentists, or lawyers)
- Entrepreneurs with incorporated businesses
This kind of planning can help ensure a smoother transition, reduce administrative delays, and potentially save your estate thousands of dollars in probate fees.
Get Guidance That’s Tailored to You
Corporate Wills aren’t one-size-fits-all, and they need to be drafted with care. At Oak Tree Estate Law, we help business owners create estate plans that reflect their unique circumstances and protect the legacy they’ve worked hard to build.