Planning For Your Will

It is common knowledge that a Will should be prepared, particularly for parents or business owners.  However, it is always at the bottom of their to do list for a number of reasons.  We often hear people would choose to get a “template” and fill it in on their own.  As a tax advisor, a Will is part of the estate planning and deserves a precise attention to detail to ensure that your hard-earned wealth will be available for your designated beneficiaries the way you want, in the most tax efficient method.

Prior to having your Will prepared by a legal professional, you should be aware of the following:

Deemed disposition at death

When someone pass away, the Canadian tax rules deems all the deceased assets have been sold at the fair market value immediately prior to death.  When the assets have a pregnant gain, then the estate will be subject to capital gains tax.  One exception to this deemed capital gain is if the beneficiary is his/her spouse.

Other factors that should also be considered as part of the estate planning would include the availability of capital loss carry forward, unrealized capital loss, donations, capital gain exemption availability for small business owners, annual income level for the family, any income splitting opportunities, retirement planning, and many more.  Therefore, a thorough estate planning is very important about 10-15 years in advance from their retirement age.

Probate Planning-Multiple Wills

In Ontario, a probate fee of 1.5% will be payable on the value of your assets that go through the probate processes.  However, if you have a Secondary Will for the private company shares that you own, the probate will only apply to the Primary Will for your other assets.  Accordingly, if a substantial amount of your assets are inside in a private company and you have a Secondary Will to deal with your shares, then you can avoid probate tax on the value of this shares.


You should consider designating a beneficiary directly with the custodian itself rather than in a Will in order avoid the probate fees but also deferring the income inclusion on your final tax return.

Requirements for Validity

Provincial legislation prescribed the formalities, which must be adhered to, that a document be recognized as a valid will.  Extracted below are few of the requirements for a valid Will for quick reference only, please consult your legal counsel for any legal matters:

A Will is not valid unless:

  • At its end it is signed by the testator or by some other person in his or her presence and by his or her discretion;
  • The testator makes or acknowledges the signature in the presence of 2 or more attesting witnesses present at the same time; and
  • 2 or more of the attesting witnesses subscribe the Will in the presence of the testator.

This article is intended for general information purposes only and does not constitute professional advice.  Income tax law and regulation change frequently and the content on this article may no longer reflect the current state of the law. If you have any specific questions, you should consult a professional services advisor or email us for further advice.