Personal privacy has become a constant concern in modern society.
Complicated privacy legislation exists in many jurisdictions to protect personal information by imposing multiple safeguards. But, with more information being stored digitally, we regularly see reports about security breaches of major corporations’ of client and customer information databases, not to mention instances of identity fraud and theft. Clients are often concerned about the safety of the information they provide to third parties.
Despite our clients’ vigilance in keeping financial and personal matters private while they’re alive, it seems a lower standard applies to a person’s information once he or she dies.
Many people are unaware that, in many Canadian and foreign jurisdictions, wills and information regarding estate values are public. In such jurisdictions, records relating to probate applications and grants of probate are searchable by the general public.
In Ontario, for example, the public can obtain copies of wills, probate applications and grants, for a fee, where the personal representative of an estate filed a probate application with an Ontario court (unless a judge has ordered a file sealed), including probate grants from 1793 to 1970 held by the Archives of Ontario. The probate application (or application for certificate of appointment) includes the value of the deceased’s estate subject to probate as at the date of death.
These requests and viewings must be done in person at the appropriate local court filing office (for post-1970 court files) or arranged through the Archives of Ontario (for pre-1970 court files). If an estate consisted only of land (e.g., farmland), the original will may be held by an Ontario Land Registry Office (which also has publicly searchable records), as probate may not have been required to deal with the land.
Other countries also make their records public. For a fee, England and Wales make digital copies of grants of probate and wills available for online public viewing anywhere in the world through a searchable database dating back to 1858 (prior to a recent expansion of the database, it was only possible to access these documents for probate grants post-1995).
Why is it that, particularly with respect to non-contentious estates, the value of a person’s estate and the provisions of his or her last will are publicly disclosed upon death through the probate process?
While some documents may have historical importance to family members and genealogists, many may feel that one’s will and probate grant should remain confidential.
In 2013, perhaps recognizing this unnecessary privacy breach, the Law Society of England and Wales proposed an opt-out procedure for removing certain information from the grant of probate, including the value of estate assets in non-contentious proceedings. Currently, the value of a deceased’s estate is shown on various court documents contained within the court file, including the official grant of probate.
What clients can do
If clients have concerns regarding information being publicly searchable after death (e.g., overall net worth, which may include the value of private company interests such as long-held family businesses) and other matters, such as the identities of estate beneficiaries, there are planning options they can consider.
Clients whose assets do not require a court grant of the will for executors to administer them could consider using “multiple wills”: that is, executing a primary will and a secondary will (provided their jurisdictions allow it). In the primary will, the person making the will deals with all of his or her assets, except shares of private family corporations, loans or other amounts receivable from those corporations, and other assets for which probate is generally not required, such as personal and household effects. These excluded assets (the value of which often far exceeds the assets dealt with under the primary will) are dealt with in a secondary will. Upon the death of the person who made the will, the executor discloses the existence of both wills to the court, but applies for a limited court order for the primary will only. Matters relating to the secondary will generally do not become public.
Clients may also wish to consider using an inter vivos trust (including a joint partner or alter ego trust) as a will substitute. If a client establishes a trust prior to death and transfers assets to trustees via a trust deed, the deed itself, as well as the trust assets and beneficiaries, generally remain private upon the client’s death.
Jointly held property and beneficiary designations may be other ways to achieve and ensure maximum privacy for the client’s estate affairs upon death. As with any estate planning, including the strategies briefly reviewed above, proper advice from a professional advisor based on a client’s particular situation is critical.
Originally published in Advisor's Edge Report
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