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Is Your Estate Plan Up To Date?

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A 2018 CTV News poll found that more than 50% of Canadians do not have a will. That means there is a 1-in-2 chance that if you’re reading this, you do not have the most important cornerstone of your estate plan in place. If you do have a will, well done! You’re off to a great start already, but you’re likely not finished. Here are some spot checks you can do to solidify your final wishes:

1. Do a beneficiary review. Any account, insurance policy or asset where you have designated a beneficiary will
likely fall outside the purview of your will. If you haven’t checked out who gets the life insurance proceeds from your company benefit plan or dug into the beneficiary designations on your TFSAs and RRSPs, you may find some surprises.

2. Update your will. If it’s been a few years since you last looked through your will, it may be time for an update. The addition (or loss) of family members, assets, liabilities and goals may have your old will completely outdated. Be sure to work with an experienced lawyer to evaluate the changes needed to reflect your situation today.

3. Own a power of attorney and living will too. Most lawyers will recommend completing these documents in addition to your will when you have it done. These documents work in tandem to outline who is responsible and how much control they will have in the event you are medically unable to look after your own affairs. They will provide guardrails around your own medical care as well as your financial management.

4. Estimate the taxes. While Canada does not have a specific estate tax like our neighbours to the south, our tax code does apply some specific rules relating to your final tax return. Any assets that fail to qualify for a tax-free, spousal rollover will be treated as though they are sold on the day you die. This can give rise to a hefty tax bill after registered assets and capital gains are accounted for. You may find that without changes, the CRA will be taking a bigger slice of the pie than you anticipated. By taking action now, you can save your heirs a fortune!

If you’ve been procrastinating on your estate plans, don’t worry. You still have time to make things right and get your affairs in order! Your loved ones will thank you as you save them time, stress and money during difficult days.