There are more than 6 million foreign-born Canadians. There are also millions of Canadian-born snowbird boomers heading south for the winter each year. This being the case, planning the succession of foreign assets is becoming more and more popular. Using a foreign Will can be highly beneficial and is often the best way to transfer foreign property on death.
Benefits of a Foreign Will
A foreign Will allows the domestic and the foreign probate process to proceed concurrently, thereby reducing the length of time required for the foreign estate administration and distribution. Generally, an Ontario Will may be probated in a foreign jurisdiction either through “Resealing” or “Ancillary Grant”.
“Resealing” is the process of having the local court give recognition to a Will probated in a foreign jurisdiction, and is generally available in commonwealth jurisdictions, such as the United States, United Kingdom and Australia.
“Ancillary Grant” or similar processes involve probating the Will as a new one in accordance with the local probate rules and can be used where resealing is unavailable, typically in non-commonwealth jurisdictions such as Italy, France and China.
The probate rules in non-commonwealth countries are significantly different from those applicable in Ontario due to differences in legal traditions. For example, in Italy, where the legal system is based on civil law and resealing is unavailable, an Ontario Will must be notarized and published with the support of a notary before probate can proceed, while the appointment of a personal representative may not be required. These concepts are unfamiliar to many Ontario practitioners. Translation costs can also be significant.
Where available, resealing is generally the more economical approach because it is less complex and less costly than an ancillary grant. However, it requires the Ontario court to first issue probate before the foreign court will recognize the Will. This can add several months to the administration process. In addition, where there are no Ontario assets requiring probate, the need to probate solely to deal with foreign assets may unnecessarily trigger Ontario estate administration tax.
A second benefit of using a foreign Will is that it can avoid delays caused by litigation affecting an Ontario Will. If the Ontario estate is tied up in litigation, administration of the foreign estate may continue independently.
Third, because the foreign Will deals only with assets located in that jurisdiction, it provides an additional level of privacy. This can be particularly valuable where different beneficiaries are involved under each Will.
Fourth, a foreign Will prepared by local counsel will comply with local legal requirements and reduce interpretation issues. Trust provisions and other drafting concepts commonly used in Ontario may not be recognized in civil law jurisdictions, potentially frustrating the testator’s intentions.
Rondel v. Robinson Estate
While it may seem standard practice to ask clients about assets outside Ontario, this issue is often overlooked. The Ontario Court of Appeal decision in Rondel v. Robinson Estate, 2011 ONCA 493, illustrates the risks.
The testator prepared a European Will in 2002 dealing with property in Europe while recognizing the existence of a separate Canadian Will. The European Will primarily benefited her two sisters and her long-term partner, Dr. Rondel.
In 2005, she executed a new Ontario Will dividing the residue of her estate among different beneficiaries. During its preparation she did not tell her lawyer about the European Will, and her lawyer did not ask about foreign assets.
After her death, disappointed beneficiaries sought to have the revocation clause in the 2005 Will struck so the European Will could coexist.
Both the trial court and the Court of Appeal refused. The Court held that the 2005 Will was clear, properly drafted and properly executed. Extrinsic evidence from friends regarding the testator’s intentions could not be used to rewrite an otherwise unambiguous Will.
The case demonstrates the importance of thoroughly identifying all foreign assets and existing foreign Wills during the estate planning process.
Conclusion
Using a foreign Will to deal with assets located outside Canada can provide faster administration, greater privacy and increased certainty that the Will complies with local laws. Although preparing multiple Wills involves additional legal fees, those costs are often outweighed by the time, expense and complications avoided during estate administration.
It is important to consult lawyers experienced in cross-border estate planning. As Rondel v. Robinson Estate demonstrates, a single oversight during the planning stage can lead to significant uncertainty, litigation and unnecessary expense.