1) Do you have an up-to-date Will?
[x] Yes
[x] No

There is no law that states you must have a Will in Canada, but without one, your estate will be divided according to the laws in the province or territory where you reside. Even if your estate plan clearly documents all your goals and wishes as it relates to the distribution of your estate assets, without a Will there is no legal requirement any of your instructions must be followed.

Planning Tip:
Having an up-to-date Will can help to ensure that your wishes will be carried out and that your loved ones are provided for. If you have been putting off creating a Will, consider using an online platform such as Willful.

1a) If you answered yes, is your executor aware of the extent of their responsibilities?
[x] Yes
[x] No

It is important that your executor fully understands the extent of their duties and responsibilities, otherwise you run the risk they will renounce their appointment, leaving your estate with a court appointed legal representative. Your executor will need to gather up the estate assets, pay the deceased’s debts, and divide what remains among the beneficiaries, along with many other duties that will be time-consuming and stressful. Depending on your family situation and complexity of your estate, you may want to appoint a professional to be a co-executor to provide the technical expertise.

Planning Tip:
To help your executor understand their responsibilities, provide them with a copy of the Death of a Taxpayer Checklist, and review it with them to confirm they are up to the task.

1b) If you answered yes, does your executor know where to locate your important documents?  
[x] Yes
[x] No

Providing your executor with clear instructions to the location of your important documents will save them considerable time and frustration when settling your estate. If you plan to use the services of a professional executor, providing clear instructions to the location of all required documents can help to keep professional fees low.

Planning Tip:
The MyWealth Records SideDrawer app includes multiple collaborator settings so your executor will have clear instructions on where everything is. Not a member, use this Important Document Inventory worksheet and make it available to your executor.

2) Are you an executor in someone else’s will?
[x] Yes
[x] No

Being an executor is a serious commitment that should not be agreed to lightly. In addition to gathering up the estate assets, paying the deceased’s debts, and dividing what remains among the beneficiaries, you will need to perform many other duties that will be time-consuming and stressful. Should you be named as an executor with or without your knowledge in the future, provided you have not started dealing with any estate assets, you can easily renounce your appointment as executor.

Planning Tip:
For additional information on the responsibilities of the legal representative of an estate, review the Death of a Taxpayer Checklist. If you find yourself named as an executor, consider sharing the duties with a professional to limit your legal and financial exposure.

3) Do you have a Power of Attorney?
[x] Yes
[x] No

Should you become incapacitated without a Power of Attorney, your family may not be able to manage your financial affairs without the long and expensive process of applying to the courts. Your estate plan should consider the scenario where you might become incapacitated and require the assistance of a trusted person to act on your behalf.

Planning Tip:
A lawyer will generally create a Power of Attorney when preparing your Will. If you do not have a Power of Attorney, the time to setup one is before you need it. If you have been putting off creating a Power of Attorney, consider using an online platform such as Willful.

4) Do you have a Health Care Directive?
[x] Yes
[x] No

Should you become incapacitated without appointing a legal representative, your family may not be able to make decisions regarding your health without the long and expensive process of applying to the courts for legal guardianship. Your estate plan should consider the scenario where you might become incapacitated and require the assistance of a trusted person to act on your behalf.

Planning Tip:
The time to setup a Health Care Directive, also called a Personal Directive or Living Will, is before you need one. If you have been putting off creating a Health Care Directive, consider using an online platform such as Willful.

5) Do you have a disabled dependent? 
[x] Yes
[x] No

Caring for the needs of a loved one with a disability or helping to care for aging parents can be complex. Your estate plan should address their long-term care and supervision, money management and guardianship.

Planning Tip:
If you care for a person with disabilities, this Government of Canada webpage includes information on disability pensions, children’s benefits, savings plans and more.

6) Have you been married or had a partner previously?
[x] Yes
[x] No

Many people will have one or more spouses or common law partners in the course of their lives. If you have children from a previous relationship, your estate plan will need to address their financial needs as minors and their place in your Will as adults. A properly drafted estate plan that clearly communicates your wishes to your family, can help ease tensions and avoid conflicts that often lead to costly estate disagreements.

Planning Tip:
Should your relationship status change in the future, you should update your estate plan, including your Will, Power of Attorney and Health Care Directive to reflect this change. For added clarity, use the Gifting Inventory and Memorandum of Wishes worksheets to minimize the possibility of resentment between family members.

7) Are you subject to any support obligations?
[x] Yes
[x] No

Most support obligations are written agreements resulting from the breakdown of a relationship and can include spousal support and/or child support. Failing to consider all support obligations when setting up your estate plan risks the court making awards from your estate that effectively rewrite your Will.

Planning Tip:
Should your relationship status change in the future, you should update your estate plan to include any support obligations that you may become subject to. If you need to create a new Will, consider using an online platform such as Willful.

8) Do you own recreational real estate?
[x] Yes
[x] No

Owning recreational real estate that has increased substantially in value requires a plan, especially if you would like to have it remain in the family. Your estate plan should clearly document what should happen with all your assets to help you avoid potentially costly mistakes. If you plan to sell any real estate after age 65, you should consult with a financial advisor for advice on ways to reduce the tax burden and minimize any claw-back of Old Age Security benefits and the age credit.

Planning Tip:
If you decide to purchase a cottage in the future, you should update your estate plan to avoid potentially costly mistakes involving the disposition of your assets. If you currently own a cottage, use this Tax Calculator to estimate the capital gains tax that will be payable by your estate.

9) Do you own rental real estate?
[x] Yes
[x] No

Rental real estate that has increased substantially in value requires an estate plan that includes creating liquidity to pay all deferred taxes. If you plan to sell any real estate after age 65, you should consult with a financial advisor for advice on ways to reduce the tax burden and minimize any claw-back of OAS benefits and the age credit.

Planning Tip:
If you decide to purchase rental property in the future, you should update your estate plan to avoid potentially costly mistakes involving the future disposition of the assets. If you currently own rental property, use this Tax Calculator to estimate the capital gains tax that will be payable by your estate.

10) Do you own real estate located in the U.S.?
[x] Yes
[x] No

Owning real estate in the U.S. as a Canadian means that the property will be subject to U.S. probate and depending upon its value and your net worth, U.S. estate taxes as well. Another consideration of your estate plan concerns U.S. property that is owned jointly by you and your partner. If one of you should become incapacitated the property will be frozen until a guardianship process is complete, which can be both expensive and time-consuming.

Planning Tip:
If you are considering an investment in real estate located in the U.S., to avoid costly mistakes you should consult with an advisor knowledgeable in owning foreign real estate before signing any agreement to purchase.

11) Are you a U.S. citizen?
[x] Yes
[x] No
The rules around U.S. citizenship are both complex and confusing. If you were born in the U.S. to Canadian parents or if you were born in Canada to one or more American parent, you may be considered a U.S. citizen for income and estate taxes. There are several tax planning strategies that can be included in your estate plan to minimize your U.S. tax exposure

Planning Tip:
You may still be subject to U.S. tax if you work in the United States, or if you are present in the United States more than 183 days in any 12-month period. For more information visit this Canadians in USA webpage.