The Biggest Estate Planning Mistakes in Ontario (and How to Avoid Them)

The short answer: The most common estate planning mistakes in Ontario are not having a will, not updating it after major life changes, failing to name beneficiaries on eligible accounts, not planning for incapacity with a power of attorney, and not talking to family about your plan. Avoiding them helps protect your loved ones and reduce misunderstandings and disputes.

Estate planning is one of the greatest gifts you can give your loved ones. It's also one of the easiest things to put off. If you've already created an estate plan, congratulations on prioritizing yourself and your family. If not, there's no better time to check this essential task off your list.

Here are five of the most common estate planning mistakes and how to avoid them.

1. Not having a will

Many people assume they have plenty of time, and the numbers show it. According to the 2019 Canadian Financial Capability Survey, as highlighted by The Globe and Mail, only 22% of Canadians under the age of 35 have a will.

Not having an estate plan can make a difficult time even harder for your loved ones as they navigate your loss.

2. Not updating your will

A will is not a set-it-and-forget-it document. It should be updated after every major life change. Key events such as having a child, welcoming a grandchild, getting married, getting divorced, or purchasing a new property are prime times to revisit your estate plan.

The same survey found that even among Canadians aged 65 and older, 53% haven't updated their will in over five years. Life circumstances can change significantly in that time.

How often should you update your will? At McMurter & Associates, we recommend consulting an estate lawyer every three years to make sure your will and estate plan reflect your current wishes.

3. Not naming beneficiaries

Naming beneficiaries is a direct way to control your assets.

Assets with a named beneficiary can skip the probate process in Ontario, while the rest of your estate must go through probate. Assets in your will are subject to Estate Administration Tax through probate. Learn more about probate in Ontario and what to expect when you're appointed as an executor.

The Financial Post lists common assets where we recommend naming a beneficiary:

• Registered investment plans
• Tax-free savings accounts (TFSAs)
• Pensions
• Life insurance

If no individual is named, the designated asset is payable to your estate, which will be controlled by your will.

While having a will is crucial, naming beneficiaries on the appropriate accounts adds another layer of security and efficiency to your estate plan.

4. Not planning for incapacity

Life is unpredictable, and planning for the unexpected is an essential part of estate planning. Power of Attorney (POA) directives can safeguard your interests if you become unable to make decisions for yourself. There are two primary types:

POA directives are typically prepared alongside your will as part of a comprehensive estate plan. By clearly outlining your wishes, you make sure your decisions are respected, even if you cannot make them yourself. Learn more about our power of attorney services.

5. Not talking to your family

Clear communication with family members and others affected by your estate plan is just as important as the documents themselves. It reduces misunderstandings and helps prevent disputes.

How can you avoid these estate planning mistakes?

1. Make a will, and make sure it's current.
2. Review your will and estate plan after every major life change, and consult an estate lawyer every three years.
3. Name beneficiaries on registered investment plans, TFSAs, pensions, and life insurance.
4. Put both types of power of attorney in place as part of your estate plan.
5. Talk to your family so your wishes are understood.
6. Choose an experienced estate lawyer to protect your legacy and provide peace of mind for your loved ones.

Contact

Brian McMurter is a real estate and estate planning lawyer at McMurter & Associates in Whitby, helping Durham Region, Ontario residents with estate planning and real estate law. 

Contact McMurter & Associates Monday to Friday, 9 a.m. to 5 p.m. at info@mcmurter.com or call 1 800 756 7138 or 905 666 9200 to schedule a consultation.

Disclaimer: This article provides general information about Ontario law and is not a substitute for legal advice. Please speak with a lawyer about your specific circumstances before making decisions about real estate law and estate planning.