It’s estimated that more than half of Canadians do not have a will. This applies to many lawyers, too.


Well, many just don’t like to think about it.

Or -

“I can’t find time to get around to it”

“I can’t afford it right now”

“I don’t really need one”

Whatever the reason, your estate plan is very important. 

Here are a few of what I consider the important reasons to have a Will.

With no Will:

- your Estate may be given to family members you do not wish to benefit (under Ontario’s Succession Law Reform Act)

- your separated spouse may benefit from a share of your estate, which you may not intend

- if you have a common law spouse, they may not benefit from your estate, but that may not be your intention

- your step-children may not be entitled to any benefit from your estate, if you intend to give them a benefit

- if you have a spouse, that person may be entitled to $200,000 of your estate ‘off the top’ (or the whole estate, if your estate is valued at less than $200,000), with anything more than this amount divided between your spouse and your children surviving you

- if you have no spouse or no children/grandchildren, etc., your estate may be divided between your remote family members/relatives, some of whom you may not even know

- your children may be entitled to receive their share at age 18, with no trust or other oversight of the money, such a a trust for them being set up to manage the money until you wish for them to have it  

- if you have minor children, the money may have to be paid into Court, which is a costly, litigious experienced often

- you will not be able to appoint a guardian for your minor children (effective for 90 days if you do so in your Will), or express your wishes for who should care for your children, which is often considered by the Court if conflict arises

…to ensure the right person is administering your estate, and that the administration occurs in a costeffective and timely manner.

- someone will have to hire a lawyer to apply to the Court to be given authority to administer your estate, which is often costly and time-consuming, until which time your estate will likely be frozen

- someone may apply for this authority who you do not want to be in charge of administering your estate

- your estate may have to pay more estate administration taxes to the Ontario government (1.5% on the value of your assets, generally) than if you plan your estate plan properly, leaving less for your intended beneficiaries

-   if you have any foreign property, it can be complicated and costly to try to administer that if you have no Will, leaving less for your intended beneficiaries

- you may pay more taxes to the federal government than is necessary (you are deemed to dispose of your assets at fair market value on your death and there may be tax payable on your capital gains on your assets), but your Will can help you defer taxes on your death (example, property you give to your spouse on death may defer the tax payable into the future)

- most importantly, often passing away without a Will will increase the risk of litigation among your family members (and extensive fighting, lawyers’ fees and time in the Court system) – a legacy you would likely prefer to avoid if you have a proper estate plan in place

- you lose control over your estate if you do not have a Will – your estate may go to beneficiaires you did not intend

Having your estate plan done by a qualified lawyer is fairly inexpensive and, in my view, well worth the investment. If you do not have a Will, there is certainly a risk that you (through your estate) will pay far more ultimately to litigation lawyers if a dispute arises because you had not Will in place. 

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

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Generally, you can designate a beneficiary for your RRSPs.

If you do, generally the RRSP will be paid to your designated beneficiary on your passing. The RRSP will not form part of your Estate and, therefore, not be subject to Ontario’s estate administration tax.

However, the problem: the federal Income Tax Act provides that, even though the RRSP will pass to your designated beneficiary (outside of your Estate), tax will be payable by your Estate on those funds as of your death (as if you had withdrawn those funds). This can create a burden on your Estate and its beneficiaries, which they may perceive as unfair. In other words, your designated beneficiary gets the RRSP funds, but not the corresponding tax burden created by the Income Tax Act on your death.

This often causes litigation, which you were likely trying to avoid in your Estate plan.

Careful estate planning is important, including considering potential tax issues that can arise on your death.

There are some ways to potentially avoid this, such as:

1.            Having an insurance policy, payable to your estate, for example, that will pay the tax burden on the RRSPs that you designate to someone on your death;

2.            Rolling over your RRSPs to your spouse or a dependent child, if you meet the specific requirements of the Income Tax Act to do so (consultation with an accountant or tax-experienced lawyer would be helpful); and/or

3.            Designate your Estate as the beneficiary of your RRSPs – although this will mean estate administration tax is likely payable on those funds, that is likely less of a financial burden to your beneficiaries than the alternative. The Estate can receive and pay the tax on the RRSP on your death using this approach. You can even specify in your estate plan that the net amount is payable to a specific person, such as the person you could have designated as your beneficiary on the RRSP.

Estate planning is important. To avoid unintended results and possibly creating conflict among your family member beneficiaries, creating your plan with a good, qualified estate planning lawyer is well worth the modest investment.

This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We're here to help -



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