Multiple Wills Clarified: Milne Estate (Div. Ct.)

This past week, the Ontario Divisional Court issued a decision in Milne Estate (Re), 2019

ONSC 579 (the “divisional court’s decision”), which provides welcome clarity on various

points of law affecting the use of multiple wills in the province. In overturning the decision of

the Ontario Superior Court, per Dunphy J., (the “lower court decision”), the divisional court’s

decision clarifies that multiple wills can include basket clauses (referred to in the decision as

allocation clauses), that a will is not a trust and that matters of will construction need not be

considered on an application for probate. Below are a few points to assist in advising clients

regarding the impact of this decision:

1. Multiple Wills Can Include Basket Clauses

If you already have multiple wills which contain basket clauses, the divisional court’s

decision provides clarity that you do not need to amend your wills to remove these

clauses. The divisional court’s decision affirms the validity and usefulness of basket clauses, recognizing them as a useful technique for dealing with assets which cannot practically be

listed in the primary and secondary wills at the time when they are executed. In the

intervening years between when the wills are made and the testator dies, new assets may

be acquired or changes may occur in the way that assets are owned. Basket clauses offer a solution by allowing executors to allocate estate assets between the

primary will being submitted for probate and the secondary “non-probate” will, depending

on whether the executor can transfer or otherwise realize the asset without probate. If you have multiple wills which do not include basket clauses, it may be appropriate to

amend your wills to include them. Prior to the divisional court’s decision, the estates bar was somewhat split on the use of

basket clauses in multiple wills drafting, with many practitioners preferring not to use them

in the absence of validation by the courts. Given the divisional court’s support for basket clauses, it may be advisable to amend your

multiple wills to include them. Ensure that basket clauses are properly used

It is important to recall that basket clauses in multiple wills may be misused in ways that

could lead to serious problems; for example, where they are inadvertently placed in primary

and secondary wills having different residual beneficiaries - leaving the determination of

whether an asset requires probate to determine which beneficiary receives the asset. In

these cases, it may be difficult to clarify the testator’s intentions, which could lead to the

wills being declared invalid.

2. A Will is not a Trust

The divisional court’s decision includes an extensive analysis of the differences and

similarities between trusts and wills, which is of interest to clients who often ask about the

difference between an executor and a trustee in the course of preparing their wills. Although recognizing that the two roles have been conflated, the divisional court explains

that this is because both executors and trustees are generally subject to the same rules and

liabilities. The fundamental defining feature of a trust - compared to a will - is that a trust

involves the transfer of property to a trustee who then holds the legal title of the property

for the benefit of the beneficiaries.

In the case of a will, estate property is fully vested in the executor as the legal representative

during the administration of the estate, but the executor is not technically holding the estate

property as trustee for the beneficiaries of the will; properly understood, the beneficiaries of

the will have no beneficial interest in estate property until such time as it is either

distributed to them absolutely, or transferred to a testamentary trust naming them as

beneficiaries. 3. Will Construction not Necessary on Probate Application

Regarding the scope of probate review, the divisional court’s decision clarifies that the role

of the court on probate applications should be limited to ensuring that the will is the last will

of the deceased, properly executed according to the formal requirements, and without

undue influence or lack of testamentary capacity. As stated by the court: “broader questions

of interpretation and the validity of powers of appointment or other discretionary

decision-making conferred on estate trustees are matters of construction and not necessary

to the grant of probate.”

If you would like more information about multiple wills, please contact Paul Taylor by phone

at: 416-995-4024 or email: paul@taylorestateslaw.com

Web: taylorestateslaw.com