After living through the COVID-19 pandemic, more Canadians are saying they need an up-to-date Will and estate plan. Yet, despite this, fewer than half of Canadians have a Will, according to a recent RBC Royal Trust survey.
“During the pandemic, many Canadians talked about the need to get their estate plans in order,” says Leanne Kaufman, President & CEO, RBC Royal Trust. “So we wanted to survey the general public to see if they were acting on that. What we found is that that Canadians are still underprepared when it comes to estate planning, with less than half even having a Will.”
The survey, conducted by Ipsos, also asked Canadians about their reasons for writing a Will, naming an executor in their Will, or appointing a Power of Attorney. It revealed that Canadians are holding onto some persistent misconceptions – or myths – about estate planning.
Myth #1. I don’t need a Will unless I’m older or very wealthy.
The foundation of any estate plan is a valid, up-to-date Will that formally documents your final wishes and names your executor. According to the survey, 48% of all Canadians aged 18+ have a Will. That number drops sharply among younger Canadians, with only 34% of Canadians aged 35-54 and 30% of Canadians aged 18-34 having one.
When asked about their reasons for not having one, 21% of survey respondents said they don’t have enough assets, 21% said they were too young, and 18% said their finances weren’t complicated enough. These responses suggest many Canadians see Wills and estate planning as something that you only need if you’re older or wealthier. In fact, there are many important reasons for adults of all ages to have an up-to-date Will and estate plan.
“If you die without a Will, your family may not know your wishes and there can be family disputes,” says Kaufman. “Ultimately, your province or territory will determine how your estate is settled, and this often means your estate pays more tax and takes longer to settle.”
By having a Will, you can ensure your family knows your final wishes for everything from how your assets are distributed and what funeral arrangements you want, to who you want to be guardian of your minor children and what happens to your pets.
Myth #2. I don’t need to appoint a Power of Attorney unless I’m older or in poor health.
A Power of Attorney (known as a Mandatory in Quebec) is someone you appoint to be responsible for making important decisions about your finances or health care if you’re unable to make these decisions yourself, for example, due to incapacity.
Yet, according to the RBC Royal Trust survey, only 35% of Canadians have appointed a Power of Attorney for themselves. “I’m too young” (16%) or “I’m in good health” (15%) were two of the top reasons why they haven’t done so.
“While it’s true you may need a Power of Attorney when you are older and experiencing poor health, the time to appoint your Power of Attorney is before you need one. “Things can change quickly,” says Kaufman. “And you can’t always predict exactly when you will need your Power of Attorney. If you don’t have one in place when the time comes, your family members may need to get that authority from the courts, which can take time, add to their stress and cost money.”
Though survey respondents cited young age and good health as two of the main reasons why they haven’t appointed a Power of Attorney, the #1 reason was simply because they don’t know where to start (23%). A qualified professional estate lawyer, in addition to helping with your Will, can also help with your Power of Attorney.
One of your Power of Attorney’s responsibilities is making decisions about your finances, including your investments, should you be unable to make these decisions yourself. That’s why it’s important for us to have the name and contact information of your Power of Attorney on file. Please keep your Investment Advisor up-to-date about your current Power of Attorney and how they can be contacted.
Myth #3. I can’t get any help being an executor.
When creating or updating their Will, people generally name a close family member or friend as their executor. As an executor of a Will, you’re legally responsible for dozens of tasks. From locating the Will and valuing assets to filing final taxes, an executor is also responsible for paying bequests to beneficiaries. For some, it can be overwhelming, especially if they have to travel, take time off work or balance their own family responsibilities, all at a time when they’re grieving.
Yet according to the survey, relatively few Canadians are aware that they can get help from a professional executor, such as a trust company (41%). A trust company is one of your options – whether you’re naming your executor or you’ve been named an executor – and can assist with some or all of an executor’s duties.
For more information about how we can help with your estate planning, please contact your Investment Advisor.
What is …
… a Will?
A Will is a legal document that states how you want your estate to be divided among your beneficiaries after you pass away. Your estate includes your assets, such as your property, heirlooms and investments. An up-to-date Will helps your executor settle your estate according to your wishes. If you die without a Will, your province/territory will determine how your estate is settled.
… an executor?
An executor is the person (or professional firm such as a trust company) who you appoint to settle your estate. They are legally responsible for over 100 duties including locating your Will, making funeral arrangements, identifying beneficiaries, valuing and safeguarding estate assets, making tax returns, paying bequests and more.
… a Power of Attorney?
You can appoint someone you trust to be your Power of Attorney (or Mandatory in Quebec). They are responsible for making decisions about your finances and/or health care should you be unable to make these decisions yourself (for example, due to age-related health issues).
… an estate plan?
Your overall estate plan is more than just your Will. It also includes planning to minimize taxes, protect assets, give to charity and prepare the next generation for their inheritances.
In Quebec, “liquidator”, in Ontario, “estate trustee with a Will.”
Probate is not required for notarial Wills in Quebec, and may not be required in other jurisdictions in limited circumstances.
RBC Royal Trust and RBC Wealth Management are business segments of the Royal Bank of Canada. Please click the “Legal” link at the bottom of this page for further information on the entities that are member companies of RBC Wealth Management. The content in this publication is provided for general information only and is not intended to provide any advice or endorse/recommend the content contained in the publication. ®/TM Trademark(s) of Royal Bank of Canada. Used under licence. © Royal Bank of Canada 2016. All rights reserved.
In Quebec, financial planning services are provided by RBC Wealth Management Financial Services Inc. which is licensed as a financial services firm in that province. In the rest of Canada, financial planning services are available through RBC Dominion Securities Inc.