Estate Planning in Canada: Wills, Powers of Attorney, Beneficiaries and Probate

Estate planning is the paperwork that decides who receives what you own, who manages it, and who makes decisions for you if you can’t. Without it, provincial law fills the gaps, often slowly and not always as you would have chosen. This hub covers each part of a Canadian estate plan and what to do when someone dies.

The four documents of an estate plan

1. A will directs where your assets go, appoints an executor, and names a guardian for minor children. See how to make a will and what happens if you die without a will.
2. A power of attorney for property lets someone manage your finances if you become incapable.
3. A power of attorney for personal care (called a health care directive or similar in some provinces) covers medical and personal decisions. Both are explained in the power of attorney guide.
4. Beneficiary designations on RRSPs, RRIFs, TFSAs, life insurance and pensions pass those assets outside the will; see the beneficiary designation guide.

Designations override the will for the accounts they cover, so they need updating after a marriage, a separation or the death of a named beneficiary.

Assets that pass outside the estate

For many households, the home, the retirement accounts and the life insurance all pass outside the will, which still matters for everything else and for naming a guardian. Naming the estate as beneficiary on an RRSP instead of a person is compared in RRSP beneficiary vs estate, and the TFSA choices in what happens to a TFSA when you die.

Probate and taxes at death, in brief

Probate is the court process that confirms a will and the executor’s authority, and every province charges a fee for it, based on the value of the estate that passes through the will. The fees range from a nominal flat amount to a percentage of the estate value; the schedules for every province, worked examples and ways to reduce them are in probate fees by province.

Canada has no inheritance tax, but a person is treated as having sold most of what they own on the day they die, and the tax is paid on the final return, before the estate is distributed. RRSPs and RRIFs are fully taxable unless they roll over to a spouse or a dependent child. How taxes at death work is in taxes at death, and the returns the executor files in how to file taxes for a deceased person. The CPP pays a one-time death benefit to the estate of an eligible contributor.

When to update your will

A digital estate inventory

Keep the inventory with your will or in a sealed letter your executor can reach, rather than writing passwords into the will itself.

Estate planning guides

Wills and executors

• How to make a will in Canada
• What happens if you die without a will
• Best online will services in Canada
• What a will costs
• Executor vs power of attorney
• Executor fees in Canada: how executors are paid in each province

Powers of attorney

• Power of attorney guide

Beneficiaries, ownership and trusts

• Beneficiary designation guide
• Joint tenancy vs tenants in common
• Henson trusts, for a beneficiary with a disability
• Family trusts, testamentary vs inter vivos trusts and bare trusts
• In-trust accounts and gifting money to family
• Life insurance in an estate plan

Probate

• Probate fees by province
• Avoiding probate on registered accounts

Specific situations

• Cottage succession planning
• What happens to a mortgage when you die
• What happens to debt when you die
• Long-term care costs
• Funeral costs
• Prenups and cohabitation agreements

Long-term care and funeral costs also appear in the sitewide directory of what things cost in Canada.

When someone dies

• The financial checklist when someone dies
• Finances after a spouse dies
• What to do when you receive an inheritance
• Tax on an inheritance

An action sequence

For most households, the bigger risk is missing or outdated documents rather than tax.