Wills and Estates

Ten Steps to Estate Planning


An estate plan helps you plan in advance what will happen to your money and property after your death. 

For example, you can use it to increase your wealth to benefit people who will inherit from you. You can also use an estate plan to reduce taxes owing when you die. But to make an estate plan, you must take action while you’re still alive. 

10 Steps  

1. Gather your official documents. 

Here are some examples of official documents: 

  • marriage contract, or cohabitation agreement for unmarried couples 
  • divorce judgment or separation agreement 
  • co-ownership agreement (for a home) 
  • life insurance policies 
  • tax returns 
  • investment statements (e.g., bank statements, RRSP statements, TFSA statements) 
  • financial statements and partnership or shareholder agreement for your business, if you have one 

2. Prepare an inventory of what you own and your debts. 

An inventory is a list of what you own and what you owe. It is extremely useful for determining your goals as you prepare your estate plan. It also makes life easier for the person who will have to settle your affaires after your death. Make sure it is always up to date, and keep it in a safe place. 

3. Identify your goals. 

What do you want for your loved ones? Your objectives are the results you want to achieve.  

Possible objectives:

  • help your heirs receive their shares as quickly as possible 
  • make sure your spouse is financially secure 
  • increase your wealth until your children turn
  • eliminate costs around settling your affairs that might decrease your wealth 
  • decrease taxes so your heirs will receive as much money as possible 
  • prevent the person who settles your affairs from selling expensive or sentimental property to pay your debts 
  • transfer control of your business to your children 

If you have no idea what your objectives should be, you don’t have to do this alone. A financial planner or legal professional can analyse your situation, help you determine your objectives and suggest the right strategies. 

4. Make a will. 

will is essential for expressing your wishes. 

Its purpose is to 

  • say who will receive your property, 
  • name a “liquidator” (the person who will distribute your property), and  
  • name someone to take care of any children under 18 years old if their other parent dies before you. 

5. Decrease taxes when you die. 

There are several ways to decrease the taxes owed when you die, but you have to give this some thought while you’re still alive. You also have to make sure that any taxes, debts and other costs relating to your death can be paid out of what you leave behind.   

Various professionals can help you prepare a plan. They can examine your situation and suggest ways for your heirs to inherit as much money as possible. 

6. Buy life insurance. 

Life insurance takes care of your family’s financial security. The amount paid by the insurance company when you die is not taxable. It can be used to pay the taxes on the property you leave someone, such as a cottage, investment property or company. 

The insurance company issues a cheque directly to the people you name in your policy once it receives proof of your death. In other words, the insurance money is separate from your estate. 

7. Prepare a Protection mandate. 

While it is a good idea to plan what happens after you die, you should also plan for your final moments. A protection mandate (used to be called “mandate in case of incapacity”) is a document with instructions about who will take care of your well-being and finances if you are incapable of doing these things yourself.

8. Make advance medical directives. 

Advance medical directives let you put in writing your wishes about whether you want or don’t want certain kinds of medical care in certain situations. Doctors must consult this document and follow your wishes if they believe you can no longer make these decisions or express your wishes.  

9. Express your wishes about funeral arrangements. 

To make things easier for your family after your death, let them know your wishes about your funeral arrangements. You can do this verbally or in writing. You can also indicate whether you want to be buried or cremated. 

Another thing you can do is make funeral prearrangements by signing a contract with a funeral home. 

10. Consider donating your organs and tissues. 

You can donate your organs and tissues when you die by signing the sticker on your health-insurance card, through the new consent registry, or by asking your notary to insert a statement in your will or protection mandate. 

Review Your Estate Plan 

Don’t forget to review your estate plan when there is an important change in your personal or family situation. If you have divorced, your family has grown, or your property or debt situation has changed a lot, your plan might need to change too. It is also a good idea to consult a legal advisor every three or five years to see whether changes in law have affected your plan.