In this article, we will explore the key aspects of estate planning, its significance, and the steps to create an estate plan in Ontario. Additionally, we will discuss the documents needed for estate planning and convenient online options for creating them in Ontario.
- Creating an estate plan in Ontario involves having a comprehensive strategy for your end-of-life plans that goes beyond just a legal will.
- Estate planning allows individuals to have control over the distribution of their assets, make sure their loved ones are cared for according to their wishes, and reduce any financial burden on their family after they pass.
- Key documents for estate planning in Ontario can include a will, trusts (such as living trusts and testamentary trusts), and power of attorney documents for property and personal care.
What is an estate plan in Ontario?
In Ontario, an estate plan encompasses a set of legal documents and instructions that outline your wishes for after you pass. An estate plan goes beyond just a will, because it considers various other aspects, like appointing executors, guardians for minor children, creating a power of attorney, and more.
If you’re new to estate planning, you can find a glossary of common estate planning terms here.
Estate planning checklist
If you’re new to estate planning, download our estate planning checklist to help you keep track of the key documents needed for a comprehensive end-of-life plan.
Is an estate plan the same as a will in Ontario?
While a will is an important part of an estate plan, it’s not the same. An estate plan in Ontario is a comprehensive strategy that includes a legal will along with other documents, such as powers of attorney and trusts.
Why is estate planning important in Ontario?
Estate planning is important for several reasons:
- It allows you to have control over decisions regarding your assets, healthcare, and finances.
- It makes sure that your loved ones are taken care of according to your wishes and minimizes potential conflicts.
- Estate planning helps reduce the financial burden and stress on your family during a challenging time.
Estate planning for homeowners in Ontario
Estate planning is particularly important if you have large assets, like a home or property. In fact, you can think of a will like insurance for your home: it protects you in case of an emergency. You can read more about estate planning for homeowners here.
Estate planning taxes in Ontario and how to manage them
When it comes to estate planning, one common mistake is not having a plan for how to manage the taxes. As a result, there can be a tax burden left for your beneficiaries, who then may end up getting a smaller share of your estate once everything is settled. You can read more tips for managing estate planning taxes here.
How do I create an estate plan in Ontario?
Creating a comprehensive estate plan can seem like a daunting task. But really, there are just four key steps that can guide you through the process.
Step 1: Identify who should be included in your estate plan
Before you begin your estate plan, think about the key people that will play important roles in your estate plan. You will need to choose people for each of the following roles:
- Executor: Choose a trusted person as your executor to administer your estate and carry out your wishes.
- Guardian(s): Designate guardians who will care for minor children, if you have them, and raise them in the event of your passing.
- Beneficiaries: Determine the beneficiaries who will inherit your assets or receive something from your estate.
- Power of attorney: Appoint someone you trust as your power of attorney to make financial and legal decisions on your behalf if you become incapacitated.
- Witnesses: Make sure that your will and other estate planning documents are witnessed by people who meet the legal requirements.
Step 2: Determine how you want to distribute your estate
The beneficiary or beneficiaries outlined in your will are the people who you choose to pass on your property or belongings to when you pass away. So as part of creating your estate plan, you need to determine how you want your assets to be distributed among your beneficiaries.
You can also choose to leave a legacy gift or leave money to a charity.
Step 3: Outline your other wishes so they can be honoured
Beyond how you want your assets and belongings to be distributed, you should think about other wishes you may have, such as your burial and funeral arrangements, charitable donations, and any other special requests you may have.
Step 4: Formalize your estate plans
Once you’ve decided who you want to include in your estate plans, how you want to distribute your estate, and any other wishes you may have, the hard part is done! Now you can begin to formalize your estate plans and make sure that all of the necessary legal documents are prepared, reviewed, and witnessed properly.
What documents are needed for estate planning in Ontario?
To formalize your estate plans in Ontario, there are several key documents that need to be prepared.
A last will and testament
A legal will is an important document that outlines your wishes for the distribution of your assets after your passing. It also allows you to name guardians for minor children and specify funeral arrangements.
Trusts are legal arrangements that can be used to manage and distribute assets. A key difference between a trust and a will is that a trust can be applied when you are living or after you pass, whereas a will is only applied after death. Unlike a will, not everyone needs to create a trust.
In Ontario, two common types of trusts are living trusts and testamentary trusts.
Living trusts in Ontario
A living trust can come into effect during your lifetime. It allows you to transfer assets to a trustee who will manage them based on your specific instructions. Unlike wills, living trusts do not go through the probate process, so they can be more private and help get your assets to the person or people you choose more quickly.
Testamentary trusts in Ontario
A testamentary trust is something that can be included in your will and only comes into effect after you pass away. It is used by parents to give instructions for how money should be put in trust for their children or dependents, and how and when it should be allocated to them.
For example, with Willful’s testamentary trust feature, you can set the percentage of a trust that you want allocated to your children in 2-3 installments, and at what age it should be released to them.
Power of attorney documents
A power of attorney gives someone the authority to act on your behalf in financial and/or personal care matters if you become incapable of making decisions for yourself.
Power of attorney for property in Ontario
A power of attorney for property designates someone to manage your financial affairs, such as banking, investments, and property, on your behalf.
Power of attorney for personal care in Ontario
A power of attorney for personal care allows you to appoint someone to make healthcare and personal care decisions for you if you are unable to do so.
What's the best way to create an estate plan in Ontario?
Creating an estate plan in Ontario has become more accessible with the creation of online tools and services, like Willful! Consider the following options when creating your estate plan in Ontario.
Creating an online will in Ontario
Online platforms, like Willful, provide a convenient and affordable way to create a legally valid will in Ontario. These platforms guide you through the process step-by-step to make sure your will meets all the legal requirements. You can also save hundreds, even thousands, in comparison to visiting a lawyer.
Creating a power of attorney online in Ontario
Similar to online will services, you can also create a power of attorney document online in Ontario. With Willful, you can create your power of attorney documents online in just 20 minutes.
Online platforms simplify the process while making sure that your documents meet the necessary legal requirements.
Estate planning is an essential process for anyone living in Ontario, because it lets you protect your assets, make sure that your wishes are honoured, and allows you to provide for your loved ones. By following the steps outlined in this article and using online tools, like Willful, you can start creating a comprehensive estate plan.