According to the most recent Canadian census, there are at least 8.3 million immigrants in Canada, which makes up approximately 23 percent of the country's total population. A recent study conducted by Willful and Angus Reid revealed that 52% of Canadian parents don’t have a will.
With all the challenges that come with moving to a new country, estate planning shouldn’t be one of them.
To ensure loved ones are protected, it’s essential for immigrants to Canada to make an estate plan, which includes a will, power of attorney documents (POA), asset lists and more.
This article will cover everything you need to know about Canadian estate planning for immigrants, including practical steps on how to start, potential challenges that might come up, and when to seek legal advice.
Why do I need a will as an immigrant?
Your last will and testament, also known as your “will,” is a legal document that outlines how you want your assets and property to be distributed after your death.
If you pass away without a will in Canada, whether you have lived here for generations or just recently arrived, the government will make decisions about what happens to your possessions and dependents based on intestacy laws.
With a will, you decide which beneficiaries inherit your possessions, who becomes a guardian for any minor children and pets, who should manage your assets upon your death, and what your final wishes are regarding your funeral and burial.
As an immigrant, having a will is crucial for several reasons:
- Protecting your property: A will ensures that your assets are properly distributed, regardless of where they are located in Canada. If you have assets left in your home country or somewhere else, your Canadian will may not be able to accommodate them and you may need an additional will based on the requirements of those countries.
- Family estate protection: If family members reside in different countries, a will allows you to decide how your assets will be divided among them, avoiding potential conflicts or legal complications.
- Guardianship for your children: If you have minor children, a will allows you to choose who to be their guardian to care for them in the event of your passing. This is especially important for immigrants whose extended family may not reside in the same country.
- Avoiding intestacy laws: Without a will, your assets will be distributed according to the intestacy laws of the province or country where you reside at the time of your death. These laws may not align with your wishes or cultural traditions, which is why making a will is important.
- Minimizing taxes and legal fees: Planning ahead and creating a legal will can help minimize estate taxes and legal fees, especially if making a will helps your estate avoid probate or legal complications later.
How much does estate planning cost in Canada?
Depending on the type of documents you create and their complexity, the average cost of making an estate plan in Canada can range from under $50 to $957 CAD.
Here’s a breakdown of different types of estate plans and their average costs for one person:
Lawyer prices from the 2021 Canadian Legal Fees survey.
Steps to start estate planning for immigrants
Make your estate plan with Willful in just five steps:
Step 1: Customize your documents by adding your personal information
Start your will by inputting your location, legal name, and date of birth. Each province has different will and power of attorney legislation, so we ask for your current province to ensure your documents reflect where you live.
%20(online-video-cutter.com).gif)
Step 2: Indicate your marital status and any dependents
The next step is to outline your marital status and choose guardians for any dependent children or pets you may have.
.gif)
Step 3: Document your wishes for your estate
Now it’s time to document any gifts and charitable donations you would like to leave and divide your residual estate among your chosen beneficiaries.
.gif)
Step 4: Appointing executors and attorneys
The last step for making your Willful estate plan is to appoint the executor of your will, assign a person to make financial and healthcare decisions on your behalf and outline your final burial wishes.
.gif)
Step 5: Download and sign
Now that your documents are done, it’s time to execute them and make them legal. Unless you live in British Columbia and want to make a digital will, you must print out your documents and sign them in front of witnesses.
Willful provides complete instructions to help you make sure your documents are executed based on the legal requirements of your province.
Other things to consider
While you’re thinking about how to distribute your estate, remember to also consider any existing debts and liabilities you may have.
Unless your beneficiaries are co-owners or co-signers of your debts, they won’t inherit them. But your estate will have to settle any solely-owned debts you have (including credit card debts), which may eat into the assets you had set aside as gifts.
If you have assets in multiple countries, you may also want to consult a legal expert on how best to delegate your estate.
✏️ Start your estate plan today →
Unique challenges for immigrants
Willful is working to help immigrants in Canada overcome the potential challenges they may face when it comes to estate planning, including:
Language Barriers
- If English or French is not your first language, it may be difficult to understand complex legal terminology and concepts related to wills, trusts, and powers of attorney.
- Willful works to make our legal language more understandable for users, so you can better understand your estate documents and plan.
- You can reach Willful’s support staff via phone, email and live chat to answer questions about the Willful platform.
- In Canada, there may be a lack of access to estate planning resources and information in your native language, making it harder to grasp the nuances involved.
- Since our Learn Centre is accessible online, you can easily use browser extensions to translate our content to a language you are more comfortable with.
Understanding Canadian Legal Systems
- Canadian laws and regulations governing estate planning can differ significantly from other countries’ legal frameworks.
- Willful provides instructions on how to ensure your documents are executed according to your provincial estate laws.
- Difficulty in understanding the role and responsibilities of executors, trustees, and attorneys in the Canadian context.
- The Willful platform and Learn Centre, provides resources to help you better understand each element of your legal documents, including key roles and responsibilities.
Cultural Differences in Estate Planning
Willful works to make estate planning as accessible as possible, no matter what your culture may be. This is why we provide multiple different options for users to select for charities, funeral and burial wishes, and more.
Dual citizenship and estate planning
Dual citizenship may impact some elements of estate planning in Canada.
Tax implications
One of the primary challenges dual citizens may encounter is related to tax implications. Their estates may be subject to tax obligations in both countries where they hold citizenship, including potential estate taxes.
For example, the Canadian tax system is a system based on the taxpayer’s residence.
By comparison, the United States’s system is based on citizenship. Under the U.S. system, all U.S. citizens and Green Card holders, wherever they live in the world, are taxed in the U.S. on their worldwide income and subject to U.S. estate tax rules.
Different countries and different laws
Different countries have different estate laws. As a dual citizen, you may need to confirm with a legal expert if your estate plan complies with both countries' laws to avoid future conflicts.
To work with the laws of different jurisdictions, you may want to create a legal will in each country in which you have citizenship.
If you do create multiple wills, you or the legal professionals you are working with in each jurisdiction must coordinate the wording of your wills to avoid unintended revocation, make sure the wills are complementary, determine what the applicable law should be, and determine who should be liable for debts in each country.
What happens if you die without a will abroad? →
Practical tips for immigrants
Once your plan is executed, there are some other smart steps you can take to make sure your plan stays safe and is easy to update in the future.
- Keep your estate plan safe in a secure but accessible location, and inform the executors and attorneys of its whereabouts.
- Have open conversations with family members about your estate plans and final wishes. Explaining things will help prepare them for the future and decrease the chances of your will being contested.
- Review and update your estate plan periodically, especially after major life events like marriage, divorce, birth of children, or moving provinces. With Willful, you can update your documents anytime, anywhere, for free!
- Don't forget to include instructions for handling your digital assets (online accounts, cryptocurrency, etc.) in your estate plan.
- By making an asset list, you can keep detailed records of all your assets, accounts, and important documents. This will make managing your property easier for your attorneys and make the estate administration process easier for your executors.
How to avoid inheritance tax in Canada?
In Canada, there is no inheritance tax.
Even if someone who has passed away has an asset that is subject to the capital gains tax, their estate pays the tax instead of the beneficiary who receives the asset as an inheritance.
Can immigrants include individuals outside of Canada in their will?
Yes, you can name people who are not residents of Canada in your will.
Remember, though, that beneficiaries in other countries may be subject to their own country's tax and estate laws instead of Canada’s. That means they may need to pay inheritance tax or deal with other laws around inheritance.
Having an executor in another country may mean that they are subject to taxes, and it might also make it harder for them to navigate Canada’s legal system and probate process (if required).
Naming a guardian in a different country may mean your dependents have to move to live in their guardian’s country after you pass.
To ensure your wishes are executed properly internationally, you may want to consult a lawyer and a tax specialist with experience in cross-border estate planning and tax implications.
Protect your loved ones with an estate plan
Moving to a new country means keeping one eye on the present and one eye on the future. By making your estate plan, you take the future into your own hands and ensure your family is protected.
Willful makes wills for newcomers easy, affordable, and convenient. Plus, it’s only one additional step to get your power of attorney documents and asset lists as well!
Ready to start your estate plan?
