CORPORATE WILLS FOR BUSINESS OWNERS

AJ Law LLP’s Filipino lawyer and licensed paralegal can help you draft your corporate will if you have your business interest in a privately owned corporation. A corporate will, sometimes referred to as a secondary will or restricted will, is a significant choice for planning your estate. In Ontario, avoiding the delay and cost of probate and therefore the probate tax payable, which can be significant, would be reasons for getting a secondary will. One can have two different wills if you are a business owner. The first one would embrace the personal assets and the other would deal with the shares in the company or the assets of the business.

Personal Will

The personal will needs to be probated, while the secondary corporate will be expressly structured to prevent probate. This will allow the testator to legally pass the shares to the new owner or to the beneficiary without being subject to an administrative tax, also called the probate tax determined at the time of death on the basis of the fair market value of such shares or assets.

The Ontario Estates Act RSO 1990, c. E.21 governs both the general will and corporate will, as well as previous court interpretations of the legal principles affecting them. In Ontario, a competent, sound and disposing minded adult, the will-maker, sometimes referred to as the “testator” may make a valid will to appoint one or more other adults as executors to fulfill the terms of the will to describe the executors’ authority and to determine how to distribute the net assets to beneficiaries or often referred to as the testator’s heirs.

Personal Will

The personal will needs to be probated, while the secondary corporate will be expressly structured to prevent probate. This will allow the testator to legally pass the shares to the new owner or to the beneficiary without being subject to an administrative tax, also called the probate tax determined at the time of death on the basis of the fair market value of such shares or assets.

The Ontario Estates Act RSO 1990, c. E.21 governs both the general will and corporate will, as well as previous court interpretations of the legal principles affecting them. In Ontario, a competent, sound and disposing minded adult, the will-maker, sometimes referred to as the “testator” may make a valid will to appoint one or more other adults as executors to fulfill the terms of the will to describe the executors’ authority and to determine how to distribute the net assets to beneficiaries or often referred to as the testator’s heirs.

With only one will, all the assets associated with a person are pooled together, regardless of whether they are associated with a company or corporation and are solely for the use of it. This means that the entirety of the estate of that person will be charged with probate fees or estate administration tax. It also results in the trustee of the estate also known as the “executor” having to go through Probate for absolutely every single asset to ensure correct distribution of all properties. Using a secondary, or corporate will to allocate assets to the company will help to reduce or even avoid Probate for business-specific assets while at the same time reducing the amount of tax paid on assets contained only in the primary, or personal will from the estate.

To see what your next estate planning step should be, contact our Filipino lawyer today. To protect your estate, your business assets and your loved ones, the AJ Law Partners team can sit down with you, scrutinize the figures and strategize your best course of action.

Get in touch with our Angeles & de Jesus Law LLP team at 160 Eglinton Avenue East, Suite 406, Toronto, ON or via phone at +1 (416) 409-5991 or email us at info@ajlawpartners.ca for your FREE INITIAL CONSULTATION. You can also visit our website https://www.ajlawpartners.ca/ for more information about the services we offer. We would be pleased to serve your legal needs.

With only one will, all the assets associated with a person are pooled together, regardless of whether they are associated with a company or corporation and are solely for the use of it. This means that the entirety of the estate of that person will be charged with probate fees or estate administration tax. It also results in the trustee of the estate also known as the “executor” having to go through Probate for absolutely every single asset to ensure correct distribution of all properties. Using a secondary, or corporate will to allocate assets to the company will help to reduce or even avoid Probate for business-specific assets while at the same time reducing the amount of tax paid on assets contained only in the primary, or personal will from the estate.

To see what your next estate planning step should be, contact our Filipino lawyer today. To protect your estate, your business assets and your loved ones, the AJ Law Partners team can sit down with you, scrutinize the figures and strategize your best course of action.

Get in touch with our Angeles & de Jesus Law LLP team at 160 Eglinton Avenue East, Suite 406, Toronto, ON or via phone at +1 (416) 409-5991 or email us at info@ajlawpartners.ca for your FREE INITIAL CONSULTATION. You can also visit our website https://www.ajlawpartners.ca/ for more information about the services we offer. We would be pleased to serve your legal needs.