We are all aware that owning assets outside of Canada has its own set of challenges. Are you aware that it might affect your estate after you die, and that you might be well advised to have a foreign Will, as well? Do you know that the foreign law might, in fact, frustrate your estate plan?
- Forced heirship regimes (i.e. a large portion of your estate must pass to your spouse and/or children and only a portion can be distributed per your own discretion);
- Different forms of co-ownership (e.g. in Quebec, the concept of joint tenancy does not exist. So when a co-owner of property dies, the deceased’s undivided interest in the property forms part of the deceased’s estate and does not pass to the surviving co-owner);
- Citizen restriction on land ownership (e.g. in China, individuals can own their house/apartment, but the government owns the fee simple land);
- Laws on illegitimacy (e.g. an illegitimate child in the Philippines is only entitled to half of that of a legitimate child);
- Obtaining multiple grants (your personal representative will likely have to obtain a grant of probate (or equivalent grant) in every jurisdiction in which you own real property. This process is time consuming and expensive).
The moral of the story is that multi-jurisdictional estate planning is difficult and using one advisor, and a single Will, to build your estate plan could be disastrous.
Consider two Wills, instead:
Ideally, if you own assets in multiple jurisdictions, you prepare a Will dealing exclusively with the distribution of property located in each jurisdiction. For those snowbirds, that means having a B.C. Will that distributes your B.C. estate, and a Will prepared in accordance with the laws of California for your house in Palm Springs.
At a minimum, if you insist on only having one Will, that Will should be reviewed/revised by an advisor in each jurisdiction to determine whether that one Will carries out your global estate plan.
The advantages include:
- Effectiveness– If each Will is prepared in accordance with the succession laws of the particular jurisdiction, it is more likely that the Will-maker’s overall estate planning objectives will be achieved.
- Confidentiality– Depending on the rules in a particular jurisdiction, all of the Will-maker’s assets that were disclosed in the course of the B.C. probate process may have to be disclosed again in another jurisdiction. Having multiple Wills, one for each jurisdiction, avoids excessive disclosure and preserves privacy.
- Speedier and More Straightforward Administration– the single Will may need to first be probated in Canada, and then “resealed” in the foreign jurisdiction. Having 2 Wills allows both processes to occur simultaneously.
- Tax and Fee Minimization– some jurisdictions levy an estate tax or fee on all property disposed of by a Will. For example, the probate fee in B.C. is approximately 1.4% of the fair market value of the Will-maker’s property as at the date of death. Use of a single Will could expose a Will-maker’s worldwide assets to those local levies. Using multiple Wills may reduce worldwide fee exposure, and the local levies would be assessed only on property located in the particular jurisdiction to which the Will applies.
- More Favourable Legal Regimes– For example, if a Will-maker owns land in Ontario that is registered under Ontario’s old land registry system, it can be transferred without probate. In such a situation, it may be advisable to execute a separate Will that only deals with that land.
- Different Executors– Multiple Wills permit different executors be chosen for different assets. If you have real estate in the U.S., it may be beneficial to choose your cousin, the real estate mogul from Florida to be the executor of your U.S. Will. This may be useful within the Canada as well. Consider a situation where a B.C. resident owned a significant stock portfolio that was managed in Alberta. The B.C. resident could execute a separate Will in Alberta, with a different executor from his/her B.C. Will.
Some disadvantages include:
- Cost– people are reluctant to hire one lawyer and one accountant, never mind lawyers in two or more different jurisdictions. The execution of multiple Wills involves a higher up-front cost (although this may be offset by savings on the administration of the estate).
- Review and Maintenance– We recommend that everyone review their estate plan every 5-7 years to ensure that it still effectively carries out their intentions. This becomes more cumbersome if you have multiple Wills.
- Limitation Period– In B.C., the children or spouse of a Will-maker can make a Wills variation claim against the Will-maker’s estate. Part 6 of the Wills Estate Succession Act sets a limitation period for Wills variation claims. However, the clock only starts running once a grant of probate has been issued. If the use of multiple Wills means that the B.C. Will does not require probate, then this limitation period may never expire and the estate may continue to be vulnerable to claims by a disinherited spouse or child.
We at Fulton have plenty of experience in assisting our clients with their multi-jurisdictional estates. If you have questions about a particular asset, or need assistance with a global estate plan, contact a member of our Wills & Estates Team.
 Note that B.C.’s probate fee legislation provides some relief in this respect. When calculating the value of a B.C. resident’s estate, the fee is only payable on real and tangible property located in B.C. It does not matter where intangible property is located, the value of such property would still be included in the calculation of the probate fee. This means that the value of any real estate owned by the deceased in another jurisdiction would not factor into the calculation of the probate fee in B.C., regardless of whether the Will-maker had 2 separate Wills.