Last week, my mother-in-law turned 95. I won't dish out the standard MIL joke here because she turned out to be about the sweetest mom-in-law in the world. I mean, it's weird that she sleeps with her eyes open, and that she always has a Kleenex tucked in each sleeve, but she still remembers that I am her favourite son-in-law.
Or I used to be.
A tribute to this wonderful gal. She lived through the Second World War and the Blitz in London, where she was serving as a beautiful young nurse. We have a picture.
She was a head-turner.
And a rascal. This shuffling little old lady once gave the royal nose-thumbing to Hitler's deadly Luftwaffe air force.
One night during a nasty stretch of Nazi bombing, she and her friend got bored and snuck out of the basement shelter to eat milk and cookies and watch the "show" from a window upstairs.
And speaking of fireworks, another night, when her bossy floor manager at the hospital refused to give her leave, she snuck out to go dancing with some of those handsome soldier boys. She later fell in love with one of the soldiers, my father-in-law (she deserved better) who was fortunate enough to have deep blue eyes and her tender attention as he recovered from his own war wounds.
But enough about that. Mom still comes for dinner every Sunday and I have to keep a close eye on her or she'll scoop my latest espionage novel in to her church bag. I'm watching you, gramma.
May we all still be kicking at 95. And while we still have an ounce or two of lucidity, we plan for an orderly departure from this world. Here is the second half of our discussion around multiple wills strategies.
There are a few scenarios where a secondary will might still require probate.
These include:
If one of your wills is contested by beneficiaries or other interested parties.
If third parties are unable to effect a change of ownership of assets dealt with in a secondary will.
If an asset which requires probate is included in your secondary will.
If the will does not provide for an outright distribution of the deceased's assets but rather requires ongoing administration.
Such may be the case where the will creates trusts. A financial institution may be unable to open an estate or testamentary trust account without a probated will because of the potential unlimited liability to which it may be exposed. A financial institution may be held liable if it negotiates a cheque payable to the estate or trust where the will presented may not be the last will of the deceased or if it is not a valid will and the executor does not have the legal authority to act on behalf of the estate.
This issue should be considered and discussed with your financial institution as well as your estate planning lawyer at the time of drafting your secondary will.
If there is a concern that one of these issues may arise, it may not be worthwhile implementing the multiple will strategy.
Although certain assets may not require probate to change ownership and thus can be dealt with in a secondary will, it may sometimes still be beneficial to obtain probate. The benefits of obtaining probate include:
Probate starts the clock on claims that can be made against the estate - certain claims that may be brought against an estate may be time limited. Depending on applicable law, the limitation period may run from the date of the grant of probate. Without the grant of probate, the limitation period may never expire.
Protection for the executor - if an executor administers an estate pursuant to a Will that has not been probated, and the Will is later found to be invalid, the executor may be personally liable to the proper beneficiaries.
Protection for third parties - probate provides third parties, such as banks and brokerage firms, with confirmation that they are dealing with the person who is legally authorized to act on behalf of the deceased's estate. It protects them from future claims that the deceased's assets were transferred to the wrong person.
The idea here is that probate can be avoided through multiple wills, resulting in a cost savings, but it might not always be desirable to avoid probate.
Mark Ryan is an investment advisor with RBC Dominion Securities Inc. (Member-Canadian Investor Protection Fund) and these are his views, not those of RBC Dominion Securities. This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article. Ryan can be reached at mark.ryan@rbc.com.
