What is Estate Planning?

If you cannot speak for yourself- you are either incapacitated or dead- you need to tell friends and family (and the government) what you want.

If you don’t do anything, our laws make assumptions about who should handle what, and where it should go. It won’t all go to the government, but it will take longer, be more stressful for loved ones, stir up more hurt feelings, and cost more.

Estate planning is simply a clear, written indication of your wishes about:

  • Your health care
  • Your property
  • Who should handle what, and
  • What should go where.

Why Should We Do Estate Planning?

For ourselves: for your sense of autonomy (I want my wishes carried out), your peace of mind (I can sleep at night knowing things are organized), and to leave a positive -not negative!- legacy (I don’t want everyone remembering me as the one who left the mess).

For our pocketbooks: it is penny wise, pound foolish to fail to plan or to update your plan. By planning now, you reduce expense, delay and taxes later. You have worked hard to get where you are, why would you be less careful about preserving it according to how you want?

For our loved ones: by documenting your intentions properly (not on a napkin!) you reduce their stress, burden and cost. Sometimes we find it hard to get motivated to help ourselves, but we get up and get going to help loved ones.

Red Flags to Watch For

Every family is different. And every family changes over time. If we fail to plan, or if we don’t keep our plan current, our family will be left to figure out what we intended. It will cost more, it will take longer, and it will be messier, with greater lasting hurt and family tension. Here are some examples of common areas that need proper documenting.

Joint property: it passes to the survivor. Do you intend that? Or have you just put the property in joint for convenience or to avoid probate? For example, when you put the family home in joint with your one child who lives nearby (to avoid probate), what did you intend? What about the other kids? What if that child gets divorced? Has creditor problems? Doesn’t want to sell when you do?

Second marriages and common law relationships, particularly where there are children: does the new partner get it all? Or nothing? What about the children? How do you share your property with your partner, but preserve it for your kids?

Disabled children: if a disabled child receives an inheritance, how will that affect their ability to qualify for their disability pension? How do you preserve it so it can be used for their benefit but not squandered?

Taxes: Revenue Canada deems that you cashed in everything the moment before you die. So RRSPs and RRIFs and cottages etc that have accumulated gains that haven’t yet been taxed will trigger tax on death and your estate has to pay the taxes (unless it all goes to the spouse. Then there is no tax). If you have a named beneficiary on the RRSP/RRIF, that person gets the full RRSP/RRIF, and the estate is left with the tax bill. Is that what you intended?

To talk about your plan, contact our Estate Solutions group today.

Rhonda Johnson


This article is intended to give general information only. We recommend you contact a lawyer for specific legal advice.