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Many people put off estate planning because it feels uncomfortable or because they assume it is only for the wealthy. In reality, a will and two powers of attorney are among the most practical documents any adult can have. They let you choose who makes decisions for you, and they spare your family cost, delay and difficult guesswork.
Three documents, three purposes
- A will sets out who will administer your estate after you die and who will receive your property.
- A continuing power of attorney for property names someone to manage your finances if you become unable to do so, or earlier if you choose.
- A power of attorney for personal care names someone to make decisions about your health care, housing and personal needs if you cannot make them yourself.
A will speaks only after death. Powers of attorney work during your lifetime. You need both kinds of planning.
What happens if you die without a will
When someone dies without a will in Ontario, their estate is distributed according to a fixed formula set out in provincial law. The formula may not reflect your wishes or your family's needs.
If you are married and have children, your married spouse receives a preferential share of the estate, currently the first $350,000, and the remainder is divided between your spouse and your children.
Common-law partners do not inherit automatically, no matter how long you have lived together. They may have to bring a claim against the estate to receive support, which can be stressful and costly for everyone.
Without a will, there is also no named estate trustee. Someone must apply to the court to be appointed, which can add time and expense, and may require a bond.
Planning for minor children
If you have young children, a will lets you state who you would like to care for them if both parents pass away. In Ontario, an appointment of a custodian in a will is temporary, and the person named must apply to the court within a set period to continue caring for the child. Your choice still carries significant weight and gives your family clear direction.
A will can also hold money for children in trust until they reach an age you choose, rather than having funds paid to them outright as young adults.
What happens if you lose capacity without powers of attorney
An illness or accident can leave anyone unable to manage their affairs, temporarily or permanently. Without a continuing power of attorney for property, no one, not even your spouse, has automatic authority to deal with assets in your sole name.
Your family may need to apply to the Office of the Public Guardian and Trustee or to the court to be appointed as your guardian. That process takes time and money while bills, mortgage payments and business obligations continue.
For personal care decisions, Ontario law provides a ranked list of family members who may make treatment decisions. A power of attorney lets you choose the right person, rather than leaving it to a default order that may not suit your family.
Choosing the right people
The people you name should be trustworthy, organized and willing to act. Consider:
- Whether they live nearby, especially for personal care decisions
- Whether they can work cooperatively with your family
- Naming an alternate in case your first choice cannot act
- Whether to name more than one person, and whether they must act together
Talk to the people you plan to appoint so they understand your wishes.
Probate and estate administration tax
In Ontario, estates that require a Certificate of Appointment of Estate Trustee pay estate administration tax. There is no tax on the first $50,000 of the estate's value, and $15 for every $1,000 or part of $1,000 above that. A lawyer can explain which assets are likely to pass through your estate and which may pass directly to a joint owner or named beneficiary.
Keep your documents up to date
Review your will and powers of attorney every few years and after major life events.
Since January 1, 2022, marriage no longer revokes an existing will in Ontario, and a separated spouse may be treated as though they had died before you for some purposes. These changes make it important to review your documents after a marriage, separation or divorce.
Other events that call for a review include the birth or adoption of a child, buying or selling a home or business, a significant change in your finances, or the death of someone named in your documents.
Getting started
To prepare for a wills meeting, make a list of:
- Your family members and any intended beneficiaries
- Your preferred estate trustee, guardian and attorneys, with alternates
- Your main assets and debts, including property outside Ontario
- Any specific gifts you want to make
A well-prepared will and powers of attorney give you peace of mind and give your family a clear plan. Learn more about our wills and estates services.