Brian N. Radnoff and Sahar Cadili of Dickinson Wright draw our attention to an interesting Ontario Court of Appeal case which changes how corporations and their assets can be transferred by a Will by their shareholder.  The law in some other provinces (and, until Trezzi, arguably the law in Ontario) states that a sole shareholder can never effectively gift corporate assets because they are owned by the corporation.  The corporation is, after all, a separate legal person.  In Trezzi v. Trezzi, 2019 ONCA 978, however, Ontario’s highest court decided that the sole shareholder of a company could in his will gift certain corporate assets to his son. The gifts were challenged by other family members on the basis that the assets being gifted were not owned by the deceased, but were owned by the company.  The Court of Appeal

Radnoff and Cadill put the reasoning in a nutshell:

“The Court of Appeal … agreed that one must look at the deceased’s subjective intentions as reflected in the will. Justice Jamal held that the deceased intended to give all of the assets owned by Trezzi Construction to his family members upon death, such that the corporation would be left with nothing. As a result, the deceased effectively directed the winding-up of Trezzi Construction along with the distribution of all of its assets in accordance with the will, despite the fact there was no express provision that Trezzi construction be wound up.”

For the full article:  Trezzi v. Trezzi: Can You Gift Assets You Do Not Own?  (Nov. 10, 2020)