Who would care for your minor children, dependents, parents, and/or a spouse?
Would the family business continue?
Would the estate be settled according to your wishes?
Would taxes, fees, and costs be held to a minimum?
Would a trust have been appropriate for you?
Would your estate be settled in an appropriate and timely manner?
Estate planning is often associated with the wealthy or elderly, but in reality, it’s a crucial step for anyone who wants to ensure their assets are protected, loved ones are cared for, and wishes are respected. In Ontario, effective estate planning involves more than simply writing a will, it’s about creating a comprehensive plan that reflects your financial situation, personal values, and long-term goals. Estate planning gives you control over how your assets will be managed and distributed after your death. Without a proper plan, the government’s default rules determine how your estate is handled and that may not align with your intentions.
Here are Five Steps to an Effective Estate Plan in Ontario
1. Work with Your Advisor to Set Realistic Goals
The foundation of a good estate plan begins with understanding what you want to achieve.
In Ontario, estate planning often aims to:
Minimize taxes and probate fees by utilizing Graduated Rate Estate Trusts (GRE).
Graduated Rate Estate is a special type of trust that allows an estate to benefit from graduated tax rates for up to 36 months after death. Without GRE status, estate income is generally taxed at the highest marginal rate. Designating your estate as a GRE can therefore provide meaningful tax savings during the administration period, particularly if assets are generating income or being sold gradually.
Transfer assets efficiently to beneficiaries
Provide for survivors and dependants
Ensure business continuity if you own a company
Identify executors and guardians for minor children
Tradex advisors can help you to structure your plan using strategies available for RRSPs, TFSAs, life insurance, and trusts.
In Ontario, probate (officially called an “Estate Administration Tax”) applies to most estates valued over $50,000, at a rate of 1.5% on the value exceeding that threshold.
Strategic planning such as naming beneficiaries directly on registered accounts or using joint ownership where appropriate can help reduce this cost.
However, avoid joint ownership arrangements without clear documentation, as disputes may arise if your intentions are not recorded.
2. Consider Which Tools Fit Your Situation
Every Ontarian’s estate plan is unique. The right combination of tools will depend on your family structure, assets, and goals. Common instruments used in preparing your estate plan include:
A will: The cornerstone of your estate plan. It directs how your assets are distributed and names your executor.
Trusts: Useful for controlling the timing and conditions of inheritances, especially for minors or dependants with disabilities.
Powers of Attorney: These allow someone you trust to make financial or personal care decisions if you become incapacitated.
Life Insurance: Provides liquidity to cover taxes or support family members.
Living Will or Health Care Directive: Documents your medical wishes if you cannot communicate them.
If you die without a will in Ontario (intestate), provincial law determines how your assets are divided. Typically, your spouse receives the first $350,000, with one-third of the remainder to the spouse and two-thirds to your children. If you have no spouse, your estate passes to your descendants per stirpes (by branch of family).
3. Choose the Right People to Speak for You
Selecting the right individuals to manage your affairs is one of the most important and personal parts of estate planning.
You’ll need to appoint:
An Executor (Estate Trustee): The person responsible for administering your estate.
Beneficiaries: Those who will inherit your assets.
Guardians: For your minor children, if applicable.
Trustees: To manage assets held in trust.
These decisions should be made thoughtfully and communicated clearly to avoid future misunderstandings.
4. Communicate Your Wishes
Even the best estate plan can fail if your loved ones don’t understand your intentions. Be open with your family and executor about your wishes, where important documents are stored, and who to contact for professional help. Lack of communication often leads to family conflict and legal challenges.
5. Keep Your Plan Up to Date
Your life changes and so should your estate plan. Review it every few years and especially after major life events such as marriage, separation, the birth of a child, selling a business, or inheriting new assets. Updating your estate plan ensures it continues to reflect your values, relationships, and financial situation.
We would like to invite you to join us for a free estate planning webinar on November 26 at 12:00 pm (click here to sign up). The webinar will further examine the five key steps mentioned in this article and explore various tools and options that will help you create an effective estate plan.
About Tradex: Tradex Management Inc. is one of the oldest mutual fund companies in Canada, since 1960. Tradex has operated as a not-for-profit company since inception (no sales targets or commissions for advisors) and has worked with public servants to deliver excellence in investment, financial, retirement, and estate planning.
If you wish to speak to a Tradex advisor, please visit us at https://tradex.ca/ or contact us at (613) 233-3394 or advice@