Planning for Your Death Is the Ultimate Act of Love: Simple steps to help you get started
Thinking about your own death is uncomfortable — which is exactly why most people put it off.
Planning for the worst — incapacity, or death — is an act of love that relieves administrative and financial burdens for those who matter most to you. By preparing and having difficult conversations now, you can avoid unnecessary stress and potential conflict down the road.
*As always, this information is for education purposes only and is not intended as tax, legal, accounting, or investment advice. Your unique situation will vary!
My goal with this post is to distill a simple action plan for working professionals who might otherwise say, “Estate planning is only for the rich — I don’t need to worry about that right now.”
Before You Start: Key Concepts on Death & Taxes in Canada
For many financial assets, you can designate a beneficiary — these will pass directly to that person when you die.
The rest of your assets and liabilities form what’s called an estate.
There are no direct inheritance taxes in Canada, but your estate is responsible for your final tax bill.
RRSPs and RRIFs are deemed to be withdrawn immediately before death (and taxed as income to the RRSP holder).
Non-registered investments and properties are deemed to be sold (resulting in capital gains tax on net gains).
Tax-free rollovers are generally available to spouses or common-law partners (and sometimes financially dependent children or grandchildren).
Probate fees of roughly 1.5% apply in Ontario to assets that flow through your estate (provincial rules and probate rates vary). Trying to avoid probate often creates larger tax and administration problems later.
Estate administration can take years — professional legal and financial support is highly encouraged.
Advanced planning can help reduce the burden at this difficult time, and can explore options may include living gifts, phased RRSP drawdowns, and/or charitable donations.
Phew — that’s a lot to digest. But estate planning doesn’t have to happen all at once. Here are three practical Action Items to help you get started.
Action Item #1: Build a Family Money File — Create Order for the Unexpected
It’s common for a household to have 15 or more financial accounts across banking, investments, insurance, pensions, and credit cards. That can be tricky to navigate even when you’re the one who opened them — now imagine a loved one trying to sort it out without you.
The solution: Take a few hours to build a Family Money File. List all accounts and policies, including:
The institution, account number, and approximate balance
The names and contact information of key professionals (e.g., accountant, insurance agent, planner)
Save this file somewhere secure and ensure your partner and executor can access it. For households where one person handles most finances, this single act can dramatically reduce stress for the “non-money person.” It also serves as a great starting point for recurring family money meetings.
Here’s a template I have used myself: Credit to Evan Neufeld, CFP
Action Item #2: Put in Place the Key Legal Documents — The “Big 3”
Every adult should have three key legal documents in place:
A Valid Will: Governs how your assets are distributed when you pass. It also appoints a personal representative (executor) to administer your estate, directs guardianship for children, and can establish testamentary trusts to distribute assets in stages (e.g., 50% at age 25, balance at 30). Dying without a valid will (intestate) delays an already long process and means your estate will be divided under provincial rules — not necessarily your wishes. If you need more motivation to get a will, read this
A Power of Attorney for Property: Authorizes someone you trust to manage your financial affairs if you become incapacitated.
A Power of Attorney for Personal Care (Healthcare Directive): Authorizes someone you trust to make medical and lifestyle decisions if you can’t.
Pro Tips:
You can use the process of establishing your will as a chance to discuss your parents’ plans — and to talk with your executor and beneficiaries about your own.
Review these documents every 3–5 years or after major life events (marriage, divorce, births, deaths, new business).
Online tools like Willful or LegalWills.ca are better than nothing however my family chose to work with a lawyer and found real value in the process — they asked thoughtful questions we hadn’t considered and helped us navigate tricky “what if” scenarios.
Decide whether your Power of Attorney takes effect immediately (requires deep trust) or is “springing” upon a doctor’s determination of incapacity.
Ensure your executor is capable now and in the future, and ideally lives in the same province.
Action Item #3: Review Your Beneficiary Designations — Keep Paperwork and Intentions Aligned
Many financial products — RRSPs, TFSAs, life insurance, pensions — allow you to designate a beneficiary. These assets typically bypass your estate and go directly to the named person.
You can update designations by submitting new paperwork with the financial institution that holds your accounts.
Things to keep in mind:
Coordinate designations with your will — conflicting instructions can cause administrative headaches and disputes.
For registered accounts, you can name your spouse as a successor annuitant, allowing both the account and contribution room to transfer tax-deferred.
Be mindful of potential tax implications when transferring RRSPs or appreciated non-registered assets (your estate is responsible for the tax bill).
Minor children can’t directly inherit funds, ensure your will names a guardian
If in doubt, you can name your estate (or not name a beneficiary) and direct distributions through your will.
Closing Thoughts
Don’t worry if you can’t check off everything right away — just get started.
Planning for the unexpected is about care, clarity, and compassion. These steps may feel heavy, but they lighten the load for those you love most.
If this topic has you thinking about your own plans (or your parents’), drop me a note at chaz@gybefinancial.ca — I’d be happy to help you chart a calmer course forward.