Canada: 8 Costly Estate Planning Mistakes

Overheard at Crowe Soberman is a series of blog posts and videos where we talk about the things we talk about around the office and with our clients except with the cameras or recorders on. It's sort of like going out for coffee with one of our Crowe Soberman experts, but without the caffeine jitters. Feel like you need more? Connect with our author below.

According to a recent poll, half of Canadian adults say they don't have a last will and testament. Respondents believed they were "too young" to worry about it (25 per cent), and almost as many said they didn't have enough assets to make a will worthwhile (23 per cent). Regardless of the amount of assets you may have accumulated, it's undeniable that you've worked hard for them. When it's your time, wouldn't you rather leave a legacy? We sat down with Audit & Advisory Partner and SuRE (Succession, Retirement and Estate Planning) Group member, Jordan Caplan, to discuss the most common estate planning mistakes and how to avoid them.

Mistake #1: Not Having a Will or Estate Plan

There are many things we don't know about the future but there's one thing we know for sure – we are all going to die. Some people avoid writing their will and estate plan because they can't or won't make decisions. Some people are natural procrastinators and think, "I'll put it off and get around to it whenever I have a chance." Others believe that they don't have enough assets to make it worthwhile. But even if you only have a few assets, if you die without a will (intestate), your estate is controlled by a trustee (in Ontario). Any of your beneficiaries may have to go through hoops to claim your assets, which in turn may not end up being distributed as you wished.

Mistake #2: Opting for a Do-It-Yourself Method

By not working with a professional to draft your will and estate plan, you could be missing out on planning prospects that you otherwise wouldn't have known about. Perhaps there are opportunities that you haven't even considered, or you may be putting the wrong estate plan in place altogether. For example, you may name your child to be your executor but what if they are a US resident? Now you've created cross-border taxation issues with respect to your estate. Working together with a professional can help you navigate the complexities with clarity and expertise.

Mistake #3: Choosing the Wrong Executor

Your executor is responsible for carrying out your wishes, distributing your assets and making sure your taxes are filed on time and correctly. Appointing the wrong executor could lead to confusion and costly mistakes. Always ensure that the person you've selected actually agrees to be your executor. There have been many instances where we find out that someone unrelated has been named the executor of an estate and they don't know about it. The unsuspecting person may not be interested in the responsibility or they might not have the time to commit. It's also crucial to have a secondary or contingent executor. If your spouse is your executor and they predecease you without a contingent executor or updated will, it will lead to issues.

Mistake #4: Not Considering Income Tax

This is a critical error. Without considering income tax, your estate could  be subject to more taxes than you would otherwise have to pay. On top of your designated beneficiaries, professionals jokingly refer to Canada Revenue Agency (CRA) as your unnamed beneficiary because they are definitely going to get their share. By working with the proper experts, you can minimize what the CRA receives to the largest extent possible. A prime example of forgetting to consider income tax would be when an individual passes on their family cottage. If you want to leave the cottage to your children, you are going to have a deemed disposition at fair market value on death. However, if the property goes to your spouse, it gets passed along tax-free and defers the tax. Strategic estate planning can not only give you peace of mind, it can reassure your family as well.

Mistake #5: Forgetting to Leave an Inventory

Without an up to date inventory, your executor has to hunt to find out what and where your assets are. If your records aren't up to date, there could be lost assets out there. From multiple bank accounts and brokerage accounts, to personal unpaid loans. If you haven't left a note for it in your will and estate plan, nobody will know that John Doe owes you $100,000 – and now you've just given him a very generous gift.

Mistake #6: Not Thinking About Your Beneficiaries

You may have someone in your will who you no longer wish to leave an inheritance. Imagine being in a second marriage without updating your will. Your assets could be going to your ex-spouse. (Probably not what you wanted to do.) Or perhaps you have a child that you want to leave assets to but they are in financial distress. Consider using a trust instead of an outright distribution. If you have a beneficiary who requires extra care or is disabled, there are qualified disability trusts with certain tax advantages.

With cross-border beneficiaries (in the US or elsewhere across the globe), you could be creating a double or adverse tax situation if your will doesn't include the proper language when outlining assets left to those beneficiaries.

Mistake #7: Neglecting to Update Your Will and Estate Plan after Major Life Events

Certainly after a major life event, you need to update your documents. Whether it's a marriage, divorce, birth, death or far-away move. You should be reviewing your will and estate plan every five years or so. While you might not have major changes to your documents, you may want to slightly tweak them. If you get married, the general assumption is that you will leave your assets to your spouse (second marriages are often different – or third or fourth these days). It's important to let people know what your wishes are to avoid legal issues down the road. If nothing has changed and your life is the status quo, you may not need to involve a professional. However, it never hurts to talk with your accountant or lawyer and see if you can make any advantageous amendments  as tax laws may have changed.

Mistake #8: Not Updating Your Power of Attorney

If you don't update your Power of Attorney, you're going to have people making decisions for you that you may not want. I have seen instances where a deceased individual hadn't updated their will in over 20 years but their executor was a former friend. The friend ultimately resented being appointed the executor and we struggled to work with them to handle the estate. You should be thinking, "If I can't act for myself, who do I want to act for me?" If 10 years ago you wanted to name an individual as your Power of Attorney, but that individual is no longer in your life (or is deceased), you're creating a massive problem for yourself and those you leave behind.

Life is always changing. Your will and estate plans are live documents. They're not static; they're dynamic and should always be changing with you. Your finances are changing. If you don't take the time to establish and update your will and estate plan, all of your wishes may not be carried out as you desire and your life's hard work could be squandered and go to waste.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions