No one likes to think about dying. It’s an unpleasant topic that our society is inadequately prepared to deal with, both emotionally and logistically. Unfortunately, this discomfort with the topic can have some serious, real-world consequences that will affect you and your family. The urge to avoid any discussion or thought of death is a large part of why over 50% of Canadians don’t have a will, as a study from 2018 shows.
If someone passes away and doesn’t leave a will, those left behind will have to deal with bureaucratic headaches, higher fees, more time and effort, and the real possibility that your wishes won’t be carried out the way you’ve envisioned. Someone who has died without a will is considered to have died “intestate,” and the distribution of their assets is decided by a formula laid down by the provincial government. This formula can vary from province to province.
And even if there is a will, the process of settling your estate can get very complicated—and expensive—for your estate executor and your remaining loved ones. Perhaps you never appointed an estate executor, and now your next of kin has been appointed by the court and is completely unprepared for the job. Perhaps you never mentioned where you kept important papers, or where the passwords to all of your online accounts were stored. All of these small, minutiae tasks perhaps don’t seem so important right now, but when your loved ones are dealing with grief and have to face an organizational nightmare on top of that, the situation looks very different.
That’s why pre-planning your estate settlement is one of the greatest gifts you can give your loved ones. Don’t think of it as something morbid like “planning your death.” Instead, think of it as an act of grace and love toward yourself and your loved ones, who will need all the help they can get when they’re grieving.
Here are the key points you’ll want to cover in order to ensure that your estate settlement plan is as thorough as possible, so that you can enjoy spending time with your loved ones with an easy conscience.
If you don’t name an executor for your estate, then the probate court usually assigns one—most likely your next of kin. You don’t want your loved one to be surprised and overwhelmed with the responsibilities of an estate executor. That’s why it’s so important to discuss this issue with your chosen estate executor beforehand. Make sure they’re aware of the responsibilities and are up for the task. Discuss the size and scope of your estate with them and make sure they know where to find everything they’ll need once the time comes (more on that below).
Your estate executor will be responsible for making sure that your wishes are carried out after you're gone and that your loved ones are taken care of properly. So it’s important to choose someone who you trust, and who’s aware of what awaits them.
There’s way more to good estate planning than writing a will. But it’s a crucial component that cannot be missed. In the best-case scenario, how an estate should be settled upon the owner’s death is detailed in their will. The will explains how someone’s estate should be split up, and what should happen to their assets. In this way, you can leave specific items and monetary amounts to your designated beneficiaries. Your will may also include instructions for your funeral service and how you’d like to be laid to rest.
Furthermore, if you have children who are minors, or an adult child with a disability who relies on you for support, your will allows you to name a guardian for them. You can also name your estate executor in your will. That person will be in charge of settling your estate according to the guidelines you've set up in your will.
Your original will must be printed out on paper; it cannot exist purely digitally. Make sure there are plenty of copies, and that they’re kept—along with the original—somewhere safe but easily accessible for your estate executor and loved ones. At least two people must witness your signatures, and the witnesses cannot be beneficiaries or be married to a beneficiary. You should also update your will whenever you have a major life event: The birth of a child, a marriage, a divorce, or anything else that might impact your finances.
Trust us, the last thing your loved ones will want to be doing once they’re grieving is scrambling through your papers in order to find records of possible financial accounts. Take care of this beforehand and make sure you have a list of all of your financial accounts, including investment accounts, chequing accounts, digital banking accounts, and savings accounts. Also think of things like retirement accounts such as TFSAs and RRSPs. Make sure you have all the information you’ll need, including account numbers and contacts.
Think about what else you own that’s of value. Your laptop, your car, your home, any jewellery or antiques, perhaps? These are all items that should be listed somewhere so that your estate executor can easily draw up an inventory of your assets for probate court. Having a detailed inventory of your financial accounts and valuables will also make the task of distributing the inheritance to your beneficiaries so much easier.
The Eirene care team is available 24/7 to provide expert guidance and answer any questions you may have.
Keep in mind that your estate executor will have to settle any outstanding debt you may have at the time of your death by using the funds from your estate. The more debt your estate has to pay, the less of an inheritance your loved ones will receive. Therefore it’s important to be transparent with your estate executor and your loved ones about the kind of debt you have, and perhaps make a plan to start paying off high-interest debt like credit card debt.
If you’re planning on passing on your assets to your spouse or common-law partner, then it may be smart to set all accounts as joint and make sure that properties and titles are in both names, if this isn’t already the case. That way, the process of transferring assets will go much smoother once the time comes. This is also a good time to make sure you’ve named beneficiaries for your pension, retirement accounts, and insurance policies.
A quick note on joint accounts: When speaking of joint accounts, the categories that exist are tenancy in common and joint tenancy. Tenancy in common is a term that describes the ownership of an asset by two or more individuals together, but without the right of survivorship. What this means is the following: If you and your spouse own a property and your spouse passes away, their share of the property (more specifically, the value of that share) doesn’t automatically go to you. Instead, it’s considered part of their estate, and will be settled and distributed according to estate settlement procedures. You don’t automatically have a right to your spouse’s share.
Joint tenancy, on the other hand, means that you and your spouse or partner both own an asset together. This means that if you and your spouse have joint tenancy, their share of the asset automatically passes to you once they die, and vice versa. This process is obviously quicker and simpler, often eliminating the need for probate.
Estate planning doesn’t have to be a nebulous or intimidating affair. If you plan ahead, keep your estate plan updated as your life changes, and ensure your affairs and those of your loved ones are prepared for the next step, then you can rest easy knowing that you’ve done your part in ensuring that your loved ones will be taken care of once you’re gone.
Clear Estate’s mission is to demystify the responsibilities of an estate executor and help you get through this process as painlessly and efficiently as possible. Settling a loved one’s estate can be emotionally draining, time-consuming, and even expensive if you’re not careful. We want to empower you to settle your loved one’s estate efficiently and confidently.
Changing the way estates are settled.