Estate Planning: What to Do Now to Make Things Easier Later

Writing a last will and testament is just one element of a comprehensive estate plan.

Estate planning primarily involves deciding what will happen to your assets when you die, as well as who will carry out those wishes.

It may also involve setting up trusts, implementing strategies to minimize taxes, making arrangements for business partnerships, advance health directives and more.

How to know it's time to make an estate plan

If you have valued assets or people who mean a lot to you, it’s time to think about creating an estate plan. Even if it’s just a collection of old baseball cards or a favourite niece you want to provide for, an estate plan can help ensure that your wishes are honored.

Major life events — such as getting married or divorced, having a child, experiencing a significant change in assets, retiring, a serious medical diagnosis, or starting a business — are also good times to make or update your estate plan, because they are most likely to impact your desires for asset allocation.

What happens if I just don't make an estate plan?

If you pass away or become incapacitated without legally-binding documents to communicate your wishes, it’s not your family or friends who determine what happens to you and your estate, but rather the estate laws in your province or territory.

For example, in Ontario, the province’s Succession Law Reform Act delineates how a person’s money and possessions are distributed.

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Some Canadian jurisdictions favour the spouse when dividing up an estate, while others favour the children or divide assets between the children and the spouse. Such arrangements could potentially make it very difficult for your spouse to maintain the household or pay the mortgage.

It’s also worth noting that when you die intestate, the distribution of your assets could be significantly delayed. Plus, your estate might be subject to higher probate taxes if you don’t have a will with named beneficiaries.

Estate planning is important because it allows you to ensure that your wishes about your health and the fate of your estate are honoured, rather than leaving it up to the courts and jurisdictional estate laws.

Building your estate plan: Simple steps to get started

1. Write a will

During the process of planning and drafting your will, you'll do things like inventory your physical and financial assets, think about who you'd like to name as your executor, who your beneficiaries will be, how you'd like your assets to be distributed among them, and how your debts should be handled.

» Learn more in our full guide to writing your will.

2. Organize your digital assets

These days, digital property is just as valuable and meaningful as the physical items we own. That means, it deserves consideration in your estate plan. Think about how you want the following to be handled in the event of your passing:

You'll want to leave instructions, passwords, or make adjustments to any legacy access settings offered by the platforms you use (like, Google Inactive Account Manager or Apple Legacy Contact).

3. Consider life insurance

Life insurance can play an important role in estate planning by providing funds that your beneficiaries can use to cover final expenses or debts, or to replace the income you were bringing in to the household.

Term life insurance is usually the simplest and most affordable option, offering coverage for a set number of years, while permanent policies — such as whole or universal life — provide lifelong coverage and may include a cash-value component.

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Life insurance can help protect your family from financial strain, but it isn’t necessary for everyone, and permanent policies can be expensive.

Think about your dependents, debts and long-term financial goals to decide whether life insurance belongs in your estate plan.

4. Name someone to make decisions if you can't

Estate planning isn’t just about what happens after death — it’s also about what happens if you can’t make decisions while alive.

In addition to an executor, you may also consider authorizing power of attorney, which gives the person of your choosing the right to make decisions about your finances, should you be mentally or physically unable to do so. There are significant risks and benefits to awarding power of attorney, however, so make sure you are fully informed about your province’s rules before doing so.

Finally, think an advance directive or living will. An advance directive outlines the types of medical treatment you want, even if you're unable to communicate on your own. You can also appoint someone to make medical decisions on your behalf, in the event that you're incapacitated.

5. Make funeral arrangements

It is possible to pre-pay for both funeral and burial services. If you have strong preferences about your funeral, or would prefer not to leave the cost to others, making these arrangements in advance can bring some peace of mind. You can also include details about how your funeral or memorial service should be conducted in your will.

6. Store documents in an easy-to-find place

A well-organized estate plan isn’t just about having the right documents — it’s about making sure the person settling your estate can actually access them.

Keep important records, such as your will, insurance policies, property deeds, tax returns, loan statements and investment account details, together in a secure but accessible place.

You may also want to include a list of digital accounts, passwords or instructions for your password manager, as well as contact information for your lawyer, financial advisor and insurance providers.

Let your executor know where this information is stored and how to access it. Doing this upfront can save weeks of searching and reduce stress for the people handling your final affairs.

More helpful estate planning tips