Estate Planning in Ontario: What Every Family Needs to Know

Estate planning in Ontario comes down to four pieces: a valid will, two powers of attorney (one for property and one for personal care), current beneficiary designations on your registered accounts and insurance policies, and a plan for the probate fees and income tax your estate will face. If you own a home, have savings, or have people who depend on you, you already have an estate, and without a plan the province's Succession Law Reform Act decides what happens to it. This guide, written by Marc Pineault, a retirement planner in London, Ontario, walks through each piece and how they fit together.

Why Estate Planning Matters More Than You Think

Most people know they should have a will. Far fewer actually have one that is current, properly drafted, and part of a broader plan. In my experience working with families across London, Ontario, estate planning is the area most likely to be postponed indefinitely. People tell themselves they will get to it when they are older, when things are more settled, when they have more assets.

The reality is that estate planning is not just about distributing assets after death. It is about protecting your family while you are alive, ensuring someone you trust can make decisions if you become incapacitated, minimizing taxes and fees that erode what you leave behind, and keeping your family out of court.

Ontario has specific rules that govern how estates are handled, what happens when someone dies without a will, and how much the government takes in probate fees. Understanding these rules is the first step toward building a plan that actually works for your family.

Start With a Valid Will

A will is the foundation of any estate plan. In Ontario, your will directs how your assets are distributed, names an executor (called an estate trustee in Ontario), and can name a guardian for minor children. Without a will, Ontario's Succession Law Reform Act dictates who inherits your assets, and the result may not match your wishes.

If you die without a will in Ontario and you are married with children, your spouse receives the first $350,000 of your estate (the preferential share), and the remainder is split between your spouse and children. If your estate is worth $600,000, your spouse receives $350,000 plus one-third of the remaining $250,000 ($83,333), while your children share the other $166,667. For blended families, this default distribution can create real conflict.

What Makes a Will Valid in Ontario

For a will to be valid in Ontario, it must be in writing, signed by you in the presence of two witnesses, and signed by those two witnesses in your presence. Ontario also recognizes holograph wills, which are written entirely in your own handwriting and signed by you with no witnesses at all. A holograph will is legally valid, but it is far more likely to be challenged and is generally not a good fit for anything beyond the simplest situation. The rules on execution, revocation and intestacy are all set out in Ontario's Succession Law Reform Act, which is worth knowing exists even if you never read it.

Key Elements of a Strong Will

Estate trustee selection. Choose someone organized, financially literate, and willing to serve. Being an estate trustee is a significant responsibility that can take one to three years to complete. Name an alternate in case your first choice is unable or unwilling to act. The job itself is substantial. Your estate trustee will need to locate and value every asset, pay debts and taxes, file your final tax return, and distribute what remains to your beneficiaries, so choosing the right person matters as much as the will itself.

Guardian for minor children. If both parents die, the will should name a guardian. Without this, the court decides. Talk to your chosen guardian before naming them.

Specific bequests. If you want particular items or amounts to go to specific people or charities, spell it out. Vague language leads to disputes.

Residual estate. After specific bequests, debts, and taxes are paid, the residual estate is what remains. Your will should clearly state how this is divided.

Review frequency. Review your will every three to five years and after any major life event: marriage, divorce, birth of a child, death of a beneficiary, or a significant change in assets. In Ontario, marriage automatically revokes a prior will unless the will was made in contemplation of that marriage.

Powers of Attorney: The Documents People Forget

A will only takes effect after death. Powers of attorney are what protect you while you are alive. Ontario recognizes two types, and you need both. The Government of Ontario publishes free forms and a plain-language guide on its make a power of attorney page, although having a lawyer prepare both documents alongside your will is the more common route.

Power of Attorney for Property

This document authorizes someone you trust (your attorney for property) to manage your finances and assets if you become unable to do so. This includes paying bills, managing investments, filing tax returns, and making decisions about real estate.

You can make this effective immediately (a continuing power of attorney) or only upon incapacity. Most people choose the continuing form with the understanding that the attorney will only act if needed. The word continuing simply means the document stays in force after you lose mental capacity, which is exactly when it is needed most.

Without a power of attorney for property, your family would need to apply to the court for a guardianship order, a process that costs thousands of dollars, takes months, and removes the decision from your hands entirely.

Power of Attorney for Personal Care

This document covers health care decisions, living arrangements, nutrition, hygiene, and other personal matters. Your attorney for personal care can only act when you are incapable of making these decisions yourself.

This is where you can include instructions about life-sustaining treatment, preferred living arrangements, and end-of-life care. While Ontario does not formally recognize a separate "living will," your power of attorney for personal care can include these wishes and they will guide your attorney's decisions.

Choosing the Right Attorney

Your attorney does not need to be a lawyer. It should be someone you trust deeply, someone who understands your values and will act in your best interest. Consider naming a different person for property and personal care if the skills required are different. A financially savvy sibling might be ideal for property decisions, while a spouse or child who understands your health preferences may be better for personal care. As with your estate trustee, name an alternate attorney in each document in case your first choice is unavailable or unable to act when the time comes.

Ontario Probate Fees: Understanding the Real Cost

Ontario's Estate Administration Tax, commonly called probate fees, is one of the highest in Canada. The rate is straightforward:

• No tax on the first $50,000 of estate assets (Ontario stopped charging on this first tier on January 1, 2020)
• $15 per $1,000 on estate assets above $50,000

In practical terms, this works out to 1.5 percent on assets above $50,000. The tax is paid to the Ontario Superior Court of Justice when your estate trustee applies for a Certificate of Appointment of Estate Trustee, which is the formal name for probate. The current rates and the estate information return requirements are set out on the Government of Ontario's Estate Administration Tax page. Here is what that looks like for typical Ontario families:

• $500,000 estate: approximately $6,750 in probate fees
• $1,000,000 estate: approximately $14,250 in probate fees
• $2,000,000 estate: approximately $29,250 in probate fees

These fees are calculated on the total value of assets that flow through the will. The critical point is that not all assets flow through the will. Assets with named beneficiaries and jointly held property generally bypass probate, and this is where strategic planning makes a real difference.

Beneficiary Designations: The Simplest Probate Strategy

One of the most effective estate planning tools is also one of the simplest: naming beneficiaries directly on your financial accounts. In Ontario, the following accounts allow you to name a beneficiary or successor holder:

• RRSPs and RRIFs: Naming your spouse as beneficiary allows a tax-deferred rollover. Naming a financially dependent child or grandchild may also qualify for a rollover in certain cases. Naming anyone else triggers full inclusion of the account value as income on your final tax return.

• TFSAs: You can name a successor holder (spouse only) who inherits the TFSA and keeps its tax-free status, or a beneficiary who receives the funds but loses the ongoing tax shelter.

• Life insurance: Proceeds paid to a named beneficiary bypass the estate entirely. No probate fees, no creditor claims, no delays. This is one of the reasons life insurance plays such an important role in estate planning. For business owners, corporate-owned life insurance can also be a powerful estate planning tool, and the salary vs. dividends decision directly affects how much wealth stays inside the corporation at death.

• Segregated funds: Similar to life insurance, these investment products allow beneficiary designations that bypass probate.

I review beneficiary designations with every client as part of our estate planning process. It is remarkable how often designations are outdated, naming an ex-spouse, a deceased parent, or no one at all. A ten-minute review can save your family thousands in probate fees and months of delays.

Joint Ownership: Useful but Not Without Risk

Adding a child or spouse as a joint owner on a bank account or property is a common strategy to avoid probate. When one joint owner dies, the asset passes to the surviving owner automatically, outside the will.

For spouses, joint ownership of the family home is straightforward and appropriate in most cases. For other family members, it gets more complicated.

The Risks of Joint Ownership With Adult Children

Exposure to their creditors. If your child goes through a divorce, a lawsuit, or bankruptcy, your jointly held asset could be at risk.

Loss of control. A joint owner has legal rights to the asset. Your child could, in theory, sell their share or borrow against it without your consent.

Tax complications. Adding a child as joint owner of a property (other than your principal residence) may trigger a deemed disposition for capital gains tax purposes.

The Pecore presumption. In Ontario, when a parent transfers property into joint ownership with an adult child, there is a legal presumption that the child holds the asset in trust (a resulting trust) rather than as a true gift. This can lead to exactly the kind of legal dispute you were trying to avoid.

Joint ownership is a tool, not a universal solution. Use it deliberately and with professional advice.

Trusts: When They Make Sense

Trusts are not just for the wealthy. In Ontario, there are several situations where a trust can be a practical part of an estate plan.

Testamentary Trusts

Created through your will and taking effect on death, testamentary trusts can be useful when:

• You have minor children and want to control how and when they receive their inheritance
• A beneficiary has a disability and receiving an inheritance directly could affect their eligibility for Ontario Disability Support Program (ODSP) benefits (a Henson trust is specifically designed for this)
• You want to provide income to a surviving spouse while preserving capital for children from a prior relationship

Since 2016, most testamentary trusts are taxed at the highest marginal rate rather than graduated rates. The exception is a Graduated Rate Estate (GRE), which is available for the first 36 months after death and is taxed at graduated rates. A Qualified Disability Trust (QDT) also retains access to graduated rates.

Alter Ego and Joint Partner Trusts

Available to individuals aged 65 and older, these inter vivos (living) trusts allow you to transfer assets into the trust during your lifetime. Because the assets are held by the trust rather than by you personally, they do not flow through your will and are not subject to probate fees on death.

For someone with a $2,000,000 estate, an alter ego trust could save close to $29,250 in probate fees. The setup and ongoing administration costs need to be weighed against the savings, but for larger estates, the math often works.

Tax Considerations at Death

Probate fees get most of the attention, but income tax is usually the larger cost. When a Canadian dies, the Canada Revenue Agency treats them as having sold all of their capital property at fair market value immediately before death. This is called a deemed disposition. Any accrued gain on investments held in a non-registered account, a cottage, a rental property, or shares of a private company becomes taxable on the final return, which your estate trustee is responsible for filing. The CRA walks through the steps on its what to do when someone has died page, and the deadline for that final return depends on the date of death.

Three strategies come up most often when families look at reducing the terminal tax bill:

Leave appreciated assets to a surviving spouse. Capital property left to a spouse or common-law partner rolls over at its original cost, so the gain is deferred until the survivor sells the asset or dies. Registered accounts get similar treatment, as covered above.

Donate publicly listed securities through the estate. When a will directs publicly traded shares or fund units to a registered charity, the capital gain on those securities is eliminated and the estate receives a donation receipt that can be claimed against up to 100 percent of net income on the final return.

Use life insurance to fund the tax. A policy with a named beneficiary pays out tax-free and outside probate. Families often use it so that a cottage or a business does not have to be sold in a hurry to settle with the CRA.

A Worked Example on a $1,350,000 Estate

Suppose a widowed retiree in London, Ontario dies owning a home worth $650,000, a RRIF worth $400,000 with no named beneficiary, and a non-registered investment account worth $300,000 that was originally purchased for $150,000. The total estate is $1,350,000. Here is how the costs stack up:

1. The home. The principal residence exemption shelters the full gain, so no tax is owed on the $650,000.
2. The RRIF. With no surviving spouse to roll it to, the entire $400,000 is included as income on the final return.
3. The investment account. The accrued gain is $150,000. At the 50 percent inclusion rate, $75,000 is added to income.
4. Income tax. That puts roughly $475,000 of income on one return. Most of it lands in the top combined federal and Ontario bracket of 53.53 percent, and the total tax works out to approximately $205,000 before credits.
5. Probate. Because the RRIF has no named beneficiary, the whole $1,350,000 flows through the will. Estate Administration Tax on the amount above $50,000 comes to $19,500.

All in, the estate loses roughly $224,500, close to one-sixth of its value, before a single dollar reaches the children. Two small changes shift that outcome. Naming a beneficiary on the RRIF pulls $400,000 out of probate and saves $6,000, although the income tax on it is still owed by the estate. Directing the $300,000 of securities to a registered charity in the will removes the $75,000 taxable gain entirely and produces a donation receipt for the full $300,000, which can offset most of the tax on the RRIF income. The charity receives the securities and the family's tax bill falls sharply, but the children inherit less. Whether that trade makes sense depends entirely on what the family wants, which is why the numbers need to be run before the will is signed, not after.

The Family Cottage

The cottage is where these rules meet family emotion. Only one property per family unit can be designated as a principal residence for any given year, so if the city home uses the exemption, the cottage's full gain is taxable at death. The usual options are designating the cottage for some of the years of ownership (useful when its gain per year of ownership is higher than the home's), transferring it to the next generation during your lifetime and paying the tax now while the gain is smaller, or holding life insurance so the children can keep it without selling to cover the tax. Whichever route fits, the conversation about who actually wants the cottage, and who will pay the ongoing costs, needs to happen before the plan is drafted.

Common Estate Planning Mistakes

After years of working with Ontario families, these are the mistakes I see most often:

No will at all. Roughly half of Canadian adults do not have a will. Ontario's intestacy rules may not reflect your wishes, and the court appointment of an estate trustee adds cost and delay.

Outdated beneficiary designations. Life changes, but beneficiary forms often do not. Divorce, remarriage, births, and deaths all warrant a review.

Ignoring the tax bill on death. When the second spouse dies, all remaining RRSPs and RRIFs are fully taxable as income. A $800,000 RRIF on a final tax return can result in a tax bill exceeding $400,000 in Ontario. Proactive tax planning during retirement, including strategic RRSP meltdowns, can significantly reduce this burden.

No powers of attorney. Without them, your family is forced into a costly and time-consuming court process to manage your affairs.

Assuming everything goes to your spouse automatically. Only jointly held assets and assets with named beneficiaries pass outside the will. Everything else is governed by your will, or by Ontario's intestacy rules if you do not have one.

DIY wills without professional review. Online will kits can be a starting point, but Ontario's rules around execution, witness requirements, and specific legal language mean that errors can invalidate the entire document. At minimum, have a lawyer review any will you prepare yourself.

Forgetting about digital assets. Online accounts, cryptocurrency, digital photos, and social media accounts all need to be addressed. Your estate trustee needs to know what exists and how to access it.

Building Your Estate Planning Checklist

A complete estate plan for an Ontario family should include:

1. A current, professionally drafted will
2. A continuing power of attorney for property
3. A power of attorney for personal care
4. Up-to-date beneficiary designations on all registered accounts and insurance policies
5. A review of asset ownership structures (joint ownership, trusts)
6. An inventory of all assets, debts, and digital accounts accessible to your estate trustee
7. Adequate life insurance to cover estate taxes, income replacement, and debt repayment
8. A tax-efficient plan for drawing down registered accounts during retirement
9. A letter of wishes providing guidance to your estate trustee on personal matters not covered in the will
10. A conversation with your family about your plans and where to find your documents

How Estate Planning Connects to Financial Planning

Estate planning does not exist in isolation. It is directly connected to your retirement income strategy, your tax plan, your insurance coverage, and your investment structure. The decisions you make about RRSP withdrawals in retirement affect the tax bill your estate will face. The way you structure your life insurance determines whether proceeds are available immediately or tied up in probate. Your investment account registrations determine whether assets pass efficiently or get caught in unnecessary legal processes. Put simply, estate planning sits at the intersection of law, tax, and financial planning, and a gap in any one of them tends to show up in the other two.

This is why I approach estate planning as one component of a comprehensive financial plan, not as a standalone exercise. When I work with families in London, Ontario and surrounding communities, we look at all of these pieces together to make sure they are working in the same direction.

Take the Next Step

If you do not have an estate plan, or if the one you have has not been reviewed in several years, now is the time to address it. The documents themselves are not complicated, but the strategy behind them requires careful thought about your family's specific situation, your assets, and your goals.

As a retirement planner, I do not draft wills or powers of attorney. That is the role of an estate lawyer. What I do is help you build the financial strategy that makes your estate plan work: structuring beneficiary designations, coordinating account registrations, planning tax-efficient withdrawals that reduce the estate tax burden, and ensuring your insurance coverage aligns with your estate goals.

Book a fit call to talk through where your estate plan stands today. We will identify any gaps, discuss the strategies that apply to your situation, and make sure your family is protected.

Related reading: What to Do with an Inheritance in Ontario, Term vs. Whole Life Insurance, Corporate Life Insurance in Ontario, and A Step-by-Step Retirement Planning Guide for Ontario Couples. Learn more about working with a retirement planner in London, Ontario.