Avoiding an estate planning disaster

Here are some tips to minimize the pain to your finances and your loved ones if something happens to you:

  1. Have powers of attorney. Do you know what would happen if you were seriously injured in a car accident, had a stroke, or had to suddenly leave the country in an emergency? Without a valid power of attorney for both health care and finances, it becomes very difficult for anyone to act on your behalf. Getting appointed as a guardian through the courts is expensive and time-consuming, and is also permanent. Powers of attorney let someone make decisions on your behalf, and then can take that right away when you get better. They are incredibly important.
  2. Have a will. It bears repeating: what you don’t know can, in fact, hurt you. The law is very particular to where you live. Don’t assume you know what will happen to your estate, because if you’re wrong, someone else will suffer.
  3. Don’t DIY. I’ve said it many times before. Homemade wills are frequently done wrong. You’ll save a few dollars, and cost your family thousands. It’s not worth it.
  4. Keep beneficiary designations up-to-date. If you marry, separate, have children, or lose a spouse, it is critical to update your life insurance, RSP, TFSA and RIF designations to send that money straight to the beneficiary.
  5. Keep it updated. Life changes. So does the law. A will, powers of attorney and beneficiary designations all need to be updated on a regular basis to ensure that you are properly protected.

If you change your mind, be sure to change your will too

I see it all too often – a beneficiary confirms that the deceased had changed their mind about leaving money to a particular charity, or even a person, and wants to know if anything can be done after the fact. The short answer is, emphatically, no. Once you die, your will is set in stone, barring a court order – which is not easy to obtain, and having forgotten to update your will is never a valid reason.

If you change your mind, you absolutely must write it down, Don’t make changes on a copy of your will; don’t make unwitnessed changes on a typed will. See your lawyer, do it right, and then you won’t need to worry about what will happen later.


Choosing who will administer your estate is among the more difficult decisions you will make when drafting your will. However, it is also one of the most important, because it will determine how quickly your estate is distributed, as well as how well everyone gets along during the process.

You will want to choose someone who is, foremost, honest, who will follow your wishes. You will also want someone who will not deliberately antagonize the beneficiaries. Picking one child who doesn’t get along at all with the others will not help anything; nor will picking all of your children to work together, if they don’t get along. You will also, ideally, want someone who lives in your jurisdiction; many places restrict an executor’s ability to act if they are not local. In Ontario, for example, if the executor lives outside of the province, a judge can order the executor to maintain a bond, which can be prohibitively expensive.

Remember that being an executor is a hard job; it is not an honour, and you do not have to pick someone to avoid hurt feelings. Who you pick can seriously affect what you end up leaving to your loved ones. Choose wisely.

The pooled trust: an equitable solution, rather than an equal one

I have a lot of clients who have young children, and often, they are spaced a few years apart. When this is the case, a great solution might be a pooled trust.

A pooled trust keeps everything in your estate in one big trust, with money available for all of your children from the common pot. It’s held that way until the youngest child reaches a certain age, usually around 22 to allow them to finish a college or university degree. The advantage is that the younger children are not penalized for having greater costs to be paid out of trust – often, you would have been helping your children with tuition costs, etc., so older ones may have had that benefit before your death while younger children have to pay for education expenses out of their own trusts before having money for other purposes. Pooling a trust means that younger children get that same advantage; the trust is then split apart when the youngest child reaches a specified age, and each child has their own trust for their own expenses from that point.

If you have more than two children, or your children have a larger gap between them, a pooled trust might be the right solution for you.

Estate planning is for everyone

Many people feel that estate planning is only for the very rich, or those with highly complex family situations. This is simply not the case. Most of us, if we knew what will happen without a will, would go running to the nearest lawyer to have a proper will drawn up.

Are you in a common law relationship? Are you in a second marriage? Are you in a relationship with someone who is not the other parent to your children? Are you separated? Are you divorced? Do you have life insurance? Do you have young children?

These are just a few of the common situations that would be made very difficult if you die without a will. Do yourself – and your loved ones – a favour, and get one done.

Forget the money. Get a will for your kids.

One of the most tragic stories I ever heard was of a couple who were in a fatal car accident on the way home from the hospital with their newborn daughter. The baby survived without a scratch; both parents died. What made it even more tragic was that the parents did not have wills, and so to that tragedy was added another, of multiple family members fighting in court over who had the right to be the baby’s guardian.

The reason I heard this story was that my partner told it to me multiple times while I was pregnant with my first child. My husband and I had done wills shortly after moving in together, but hadn’t gotten around to redoing them after they were revoked when we got married, knowing that we were planning to start a family fairly soon. After several months of regular reminders, we finally sat down, had a VERY long discussion about who to pick, contacted them to make sure they were okay with being chosen, and then signed new wills. And just in time: our son was born about six weeks after we signed them, almost four weeks earlier than expected. Life has its own plans.

Choosing a guardian is not an easy task. In fact, it was probably one of the most difficult decisions we had to make. It’s hard to even think about not being there for your kids, let alone dwell on the subject long enough to decide who would raise them for you. But not making a decision is so much worse – and is its own decision. For one, only family members have a right to apply, so that takes out any friends who might be better suited, for geographic reasons or otherwise; also, any family member can apply, including ones who are completely unsuitable. If you have converted to a different religion, or your family is not in Ontario or even Canada, it becomes even more critical to have a guardian named.

Choosing a guardian is a difficult decision. Refusing to choose one, in not doing your will, does not make the problem go away.

Do you have a soon-to-be high school grad at home? Time for powers of attorney!

It’s an exciting time of year: high school graduation is just around the corner. Your teenager is about to spread their wings and (hopefully) become an independent adult, whether heading off to college or university or going into the workforce. One extra thing that you should be thinking about as they get ready to leave the nest, even if only temporarily, is powers of attorney.

In Ontario, anyone over the age of 16 can make a power of attorney for personal care (which includes medical care), and anyone over the age of 18 can make a power of attorney for property (which includes bank accounts). Without these documents in place, it can be extremely difficult for anyone, including a parent, to step in and make decisions on someone’s behalf in the event of incapacity. Accidents can happen, and any of us could find ourselves unable to make decisions temporarily or permanently. Having a will is important; having a power of attorney is crucial. An 18-year-old might not have enough assets to think of a will as necessary, but they should definitely get powers of attorney.

Separated or divorced? You NEED to update your will

We had another client recently who received a windfall; her former husband hadn’t updated his will, and they were separated without a separation agreement and not yet divorced, so she inherited everything on his sudden death.

I can just about guarantee you that that is not what he wanted.

In Ontario, divorce doesn’t revoke a will; it simply removes the divorced person from the will. So, if you left everything to your spouse, alternatively to your brother-in-law, he’s going to inherit even if your former spouse won’t. If you’re separated without a separation agreement, what’s in the will stands, and also, your spouse can inherit if you don’t have a will at all.

This is one of the situations where you absolutely must update your will. You can change it again after you have your separation agreement in place, if anything needs to be in there once the paperwork is all signed, but you must protect yourself now.

Don’t make these 5 estate planning mistakes

There are a lot of things that can go wrong in an estate plan, particularly if you try to DIY. Here are some of the big ones:

  1. Not planning for incapacity. All of us will die, so having a will is important. However, many of us will also become incapacitated at some point in our lives, whether temporarily or permanently. Powers of attorney are critical to have in place so that you can choose who will manage things for you in the event that you can’t take care of yourself.
  2. Not thinking about long-term care. Related to my first point, many of us will end up needing long-term care in the future. Sometimes, insurance is an option; if not, then you need to think about saving for it now so that you have choices when you’re older.
  3. Not updating your estate planning documents. Wills don’t need to be updated all of the time, but you certainly should be looking at it regularly. Life changes; don’t keep that will that names your former brother-in-law after your divorce, or that keeps your children’s shares in trust until their 40 when they’ve become responsible adults.
  4. Choosing the wrong executor or attorney. This is one of the biggest issues in estate administration: an executor who doesn’t know what they’re doing, or actively takes wrong action. Don’t pick someone out of guilt or a feeling of obligation. Pick someone who will do the right job.
  5. Not keeping records. If your executor doesn’t know about your secret bank account, eventually, that money will go to the government. At best, it will languish, not being given to anyone. Be sure to have a list of what you own so that whoever needs to administer your estate can do so.

There can be a lot of moving parts in an estate plan, but planning well now will make everything easier for your executor and beneficiaries down the road.

Getting married? Get a will.

Last week, I wrote about the dangers of being common law without a will. This week, it’s about being married – specifically, what to do once you’re getting married to prepare yourself financially. Here are some tips:

  1. Think seriously about getting a cohabitation agreement (prenup), especially if one of you is coming into the marriage with some assets.
  2. Update your estate plan. This includes getting wills and powers of attorney naming your new spouse (or not, as the case may me) so that what you want to actually happen, will. Keep in mind that getting married automatically revokes any will you had before – which is important if this is not your first marriage – but it does not revoke your powers of attorney.
  3. Update your beneficiary designations. If you biggest asset is your RRSP, and it still has your parents or siblings as beneficiaries, your new spouse will suffer financially. It’s an easy thing to update.

Getting engaged is an exciting event, but you need to take some steps to make sure that you and your soon-to-be spouse are protected financially.