Estate Planning in London, Ontario

Why Estate Planning Matters for Ontario Families

Estate planning is something most people in London, Ontario know they should do but keep putting off. It involves thinking about difficult topics, and the urgency seems low when you are healthy. But estate planning is not just about what happens after you die. It is about protecting your family, preserving your wealth, and making sure the assets you have spent a lifetime building go to the people you choose, in the way you choose, with as little tax and cost as possible.

Without a proper estate plan, Ontario law decides how your assets are distributed. The court may appoint a guardian for your minor children. Your estate will pay the maximum in probate fees. Your registered accounts may be taxed at the highest marginal rate. And your family may face years of legal complications and expense at a time when they are already dealing with grief.

A comprehensive estate plan, built in coordination with your retirement plan, tax strategy, and insurance coverage, addresses all of these concerns. As a financial planner in London, Ontario, I work with you and your estate lawyer to make sure every aspect of your estate plan is coordinated with your overall financial strategy.

Wills and Powers of Attorney in Ontario

The foundation of any estate plan is a valid, up-to-date will and powers of attorney. In Ontario, you need three core documents.

Your Will

Your will specifies how your assets are distributed after death, names an estate trustee (executor) to manage the process, and appoints a guardian for any minor children. Without a will, Ontario's Succession Law Reform Act dictates the distribution. For example, if you die without a will and have a spouse and children, your spouse gets the first $350,000 (the preferential share) and the remainder is split between your spouse and children. This default distribution can create serious problems, especially for blended families or those with business interests.

For London, Ontario business owners, the will must also address corporate shares, business succession, shareholder agreements, and the interplay between personal and corporate assets. A will that ignores these elements can lead to unintended consequences, including a forced sale of the business.

Power of Attorney for Property

This document authorizes a trusted person to manage your financial affairs if you become incapable: banking, paying bills, managing investments, filing taxes, and handling real estate. Without it, your family needs a court-ordered guardianship, which takes months and costs thousands of dollars.

Power of Attorney for Personal Care

This authorizes someone to make healthcare and personal decisions on your behalf — medical treatment, living arrangements, nutrition, and end-of-life care. Having this in place with clear instructions reduces the burden on your family and ensures your wishes are followed.

I work with estate lawyers in London, Ontario to make sure these documents are properly drafted and aligned with your financial plan. I do not draft legal documents, but I provide the financial analysis that informs the lawyer's work: asset inventories, tax projections, and recommendations for estate structures.

Minimizing Ontario Probate Fees

Ontario has some of the highest probate fees in Canada. The Estate Administration Tax is $5 per $1,000 on the first $50,000 and $15 per $1,000 on everything above. A $1,000,000 estate pays roughly $14,500. A $3,000,000 estate pays roughly $44,500.

Probate fees are calculated on assets that pass through the will. Assets that bypass the will are not subject to these fees. Here are the main strategies I use for London, Ontario clients:

• Beneficiary designations — RRSPs, RRIFs, TFSAs, and life insurance policies with named beneficiaries pass directly to those people outside the estate. This is one of the simplest and most effective probate-reduction strategies. I review all clients' beneficiary designations as part of the estate planning process.
• Joint ownership with right of survivorship— Assets held in joint tenancy pass directly to the surviving owner on death without going through probate. Commonly used for the family home and joint accounts between spouses. Joint ownership with children carries risks and should be approached carefully.
• Multiple wills — Ontario courts recognize the use of a primary will for assets requiring probate and a secondary will for assets that do not, such as shares of a private corporation. The secondary will is not submitted for probate, saving fees on the value of those shares. This is particularly valuable for business owners.
• Inter vivos trusts — A living trust created during your lifetime can hold assets that pass to beneficiaries outside the estate. The trust files its own tax return and is subject to the 21-year deemed disposition rule, but it can be effective for specific situations.
• Strategic lifetime gifting — Transferring assets during your lifetime reduces the estate value. But this must be done carefully because gifts of capital property trigger a deemed disposition. I analyze the trade-off between probate savings and immediate tax costs.

Beneficiary Designations: Getting Them Right

Beneficiary designations are one of the most overlooked aspects of estate planning. They are simple to set up but can have enormous consequences if they are wrong. Your RRSP, RRIF, TFSA, and life insurance beneficiary designations override what your will says. That means even if your will leaves everything to your spouse, a stale beneficiary designation from a previous relationship could direct those funds somewhere you did not intend.

Key considerations for beneficiary designations include:

• Naming your spouse as beneficiary on registered accounts allows a tax-deferred rollover on death, avoiding immediate taxation
• Naming the estate as beneficiary subjects the proceeds to probate fees — which can often be avoided by naming an individual
• Designations must be updated after marriage, divorce, or other life changes
• For TFSAs, naming a spouse as successor holder rather than beneficiary allows the account to continue tax-free
• For insurance policies, consider whether to name individuals or the estate based on your estate plan's needs

I review every client's beneficiary designations as part of the estate planning process. It is one of the simplest things to fix and one of the most impactful.

Trusts in Ontario Estate Planning

Trusts are legal arrangements where a trustee holds and manages assets on behalf of beneficiaries. While the tax advantages of trusts have been reduced in recent years, they remain valuable in many situations for London, Ontario families.

Testamentary Trusts

Created through your will and coming into effect on death, these are commonly used to manage inheritances for minor children, protect assets from a beneficiary's creditors or divorce, provide for a beneficiary with a disability while preserving their eligibility for government benefits, control the timing of distributions, and provide for a surviving spouse while ultimately directing assets to children from a prior relationship. Since 2016, only Graduated Rate Estates (existing for up to 36 months after death) benefit from graduated tax rates. After 36 months, testamentary trusts are taxed at the top marginal rate.

Inter Vivos (Living) Trusts

Living trusts are created during your lifetime. An Alter Ego Trust is available to individuals over 65 and lets you transfer assets without triggering a deemed disposition, while the trust bypasses probate on death. A Joint Partner Trust works similarly for couples. Family trusts can hold shares after an estate freeze, allowing income to be distributed among family members while maintaining flexibility about the final distribution.

The 21-year deemed disposition rule applies to all trusts in Canada. Every 21 years, a trust is deemed to dispose of its capital property at fair market value, potentially triggering significant tax. This must be factored into long-term trust planning.

Tax-Efficient Wealth Transfer Strategies

The goal of estate planning is to transfer your wealth to your chosen heirs with as little tax and cost as possible. In Ontario, the costs on death can include income tax on deemed disposition of RRSPs, RRIFs, and capital property, Ontario probate fees, and income tax on corporate assets if a company is wound up. Here are the key strategies:

Spousal Rollovers

Canadian tax law allows most assets to transfer to a surviving spouse on a tax-deferred basis. RRSPs and RRIFs roll into the surviving spouse's registered accounts. Capital property transfers at the original cost base. The principal residence exemption continues. This deferral is automatic for assets passing to a spouse through the will, and it buys time for the surviving spouse to implement further planning.

Strategic RRSP Drawdowns

Rather than leaving a large RRSP to be fully taxed on the second death, I recommend strategic drawdowns during retirement as part of your retirement income plan. By withdrawing at moderate tax rates during your lifetime, you reduce the balance that gets taxed at the highest rate on death.

Life Insurance as an Estate Funding Tool

Life insurance provides immediate tax-free cash on death. This can fund the income tax bill on registered accounts and capital gains, pay Ontario probate fees, cover executor and legal fees, and equalize the estate among heirs when assets are not easily divisible. For business owners, corporate-owned insurance creates a Capital Dividend Account credit, enabling tax-free distribution as part of the corporate plan.

Estate Freezes for Business Owners

An estate freeze locks in the current value of your business interest by exchanging common shares for preferred shares at a fixed redemption value. New common shares go to your children or a family trust, so all future growth accrues to the next generation. This caps your tax liability on death, shifts growth to the next generation at potentially lower rates, enables each child to claim their own Lifetime Capital Gains Exemption, and creates a natural framework for succession. Timing is critical — I work with your accountant and lawyer to get it right.

Charitable Giving Strategies

For charitably minded clients, incorporating giving into your estate plan can dramatically reduce the tax on death. A charitable donation through your will generates a tax credit on your final return. Donating publicly traded securities directly to a charity eliminates the capital gains tax while providing the full credit. Life insurance naming a charity as beneficiary can create a substantial legacy gift while preserving the estate for family.

Estate Planning for Different Situations

Young Families

For London, Ontario families with young children, the priorities are appointing guardians, having adequate life insurance, setting up testamentary trusts to manage inheritances until children are mature enough, and getting powers of attorney in place.

Blended Families

Blended families face unique challenges. How do you provide for your current spouse while making sure children from a prior relationship get their inheritance? Spousal trusts, life insurance, and carefully drafted wills are essential. Without explicit planning, Ontario law may produce outcomes that disadvantage children from a previous relationship.

Business Owners

Business owners in London, Ontario have the most complex estate planning needs: business succession, estate equalization when one child inherits the business and others do not, tax on deemed disposition of corporate shares, interaction between shareholder agreements and the will, and the use of estate freezes and corporate strategies. My corporate planning expertise ensures these are addressed together.

High-Net-Worth Families

For families with significant wealth, estate planning involves multiple trusts, complex insurance strategies, philanthropy, multi-generational wealth transfer, and coordination across jurisdictions if properties are held outside Ontario. The stakes are higher, and the savings from proper planning are proportionally larger.

Coordination with Your Overall Financial Plan

Estate planning does not exist in isolation. Every estate strategy has implications for your retirement income, your tax position, your insurance coverage, and your investment portfolio. An estate freeze affects your tax plan. RRSP drawdown strategies affect both your retirement income and your estate tax. Insurance needs are driven by your estate tax projection. Everything is connected.

This is why I build estate plans as part of a comprehensive financial plan, not as a standalone exercise. The financial analysis I do — asset inventories, tax projections, probate calculations, insurance needs assessments — informs the legal documents your estate lawyer drafts. And I review the plan regularly, updating it as your assets change, your family situation evolves, and tax laws shift.

How the Estate Planning Process Works

• Complete asset inventory — I compile a full picture of your assets, liabilities, registered accounts, insurance policies, corporate interests, and beneficiary designations.
• Tax projection on death — I model the tax consequences for both the first and second spouse's death, identifying the total liability and ways to reduce it.
• Probate analysis — I calculate the Ontario probate fees under your current structure and identify reduction strategies.
• Strategy recommendations — Based on the analysis, I recommend specific actions: beneficiary designation changes, insurance solutions, trust structures, estate freezes, and charitable giving.
• Lawyer coordination — I provide a detailed brief to your estate lawyer outlining the financial structure and recommendations, so the legal documents implement the plan correctly.
• Ongoing review — I review your estate plan as part of annual financial planning, updating it as your assets, family, and the tax landscape change.

Related Services