Do I Need a Separate Will for My Business?

Verdict: not required, but a real tool in Ontario

No jurisdiction requires a business owner to have a separate will for their business. A single will can validly dispose of all property a person owns at death, personal and business assets alike. What changes the calculus is a body of Ontario case law recognizing that a testator (the person making the will) can choose to use two wills instead of one, a primary will for personal assets and a secondary “business” will for things like private company shares, specifically to reduce probate-related costs.

The legal foundation for this is the testator’s right to organize their affairs efficiently. As Ontario courts have put it, “testators have the right to organize their affairs in such a way as to result in their estates paying as little as possible in both estate fees and taxes” (Granovsky Estate v Ontario (1998), as cited in Gordon v Gordon, 2022 ONSC 550 (CanLII), para 41). A separate will is one way of exercising that right, not an obligation.

What actually drives the decision: probate cost, and it differs by province

The reason a second will matters in Ontario, but far less in Alberta, comes down to how each province charges for probate (the court process confirming a will and appointing an estate trustee).

Because Ontario’s tax is a percentage of estate value with no ceiling, keeping high-value assets like private company shares out of the probate process (by placing them under a secondary will that never needs to be probated) can meaningfully reduce what the estate pays. Ontario courts have explicitly upheld this: “A testator may use multiple wills to govern the disposition and administration of different pools of assets he owns at the time of death” (Estate of John Kaptyn; Kaptyn v Kaptyn, 2010 ONSC 4293 (CanLII), para 55).

Alberta’s fee schedule works differently. It is a flat amount tied to a value bracket, topping out at $525 for any estate over $250,000. Whether an estate is worth $300,000 or $30 million, the probate fee itself does not increase. That removes most of the financial incentive that makes a secondary will worthwhile in Ontario. No Alberta court decision endorsing multiple wills for this purpose was located for this article, so this remains an open question rather than a settled Alberta practice.

Business shares are treated as a distinct category either way

Even without a second will, private company shares are handled as their own category of estate asset during probate in Alberta. Alberta’s Surrogate Rules require specific proof of a shareholding on a grant application: “in the case of private company shares, (i) a certificate, or (ii) a letter from a duly authorized officer of the company or from the company’s lawyer confirming the holding” (Surrogate Rules, Alta Reg 130/1995). This documentation requirement exists regardless of whether the shares sit inside a single will or a separate one.

Alberta’s succession rules generally come from its own consolidated Wills and Succession Act, SA 2010, c W-12.2, which “specifies how and to whom property is transferred when a person dies” and replaced several older statutes (the Wills Act, Intestate Succession Act, Survivorship Act, Dependants Relief Act, and part of the Trustee Act). This is Alberta’s own framework, distinct from Ontario’s.

One tax rule applies everywhere, regardless of how many wills you use

Separately from probate costs, the Income Tax Act imposes a federal rule that applies the same way in Ontario, Alberta, and every other province: on death, a person is treated as having sold all their property, including private company shares, immediately beforehand, at fair market value. The Canada Revenue Agency describes this as follows: “When a person dies, they are considered to have sold all their property just prior to death, even though there is no actual disposition or sale. This is called a deemed disposition and may result in a capital gain or capital loss, unless the property or asset is transferred to a spouse or common-law partner or a specific exception applies.”

This deemed disposition tax is the underlying reason many business owners look at succession planning closely, but it is not affected by whether the shares pass under a primary will or a secondary one. Splitting a will can reduce provincial probate costs; it does not change what is owed under this federal rule.

Wills and estates, including the question of whether a separate business will is needed, fall under provincial and territorial jurisdiction, not federal law (Government of Canada, “What to do when someone dies: Estates and wills”). There is no national rule requiring or prohibiting a business will; the answer depends on which province’s rules apply to the estate.

Where this leaves a business owner

There is no legal requirement, in Ontario, Alberta, or anywhere else in Canada, to have a separate will for a business. The question is whether the potential probate-cost savings justify the added complexity of maintaining two wills. In Ontario, where Estate Administration Tax scales with estate value, courts have repeatedly upheld the practice for business owners with significant private company shares. In Alberta, where probate fees are flat and capped, the same structure has a much weaker cost justification, and its acceptance for business succession purposes has not been confirmed by a court decision located for this article.