A Simple—But Powerful—Estate Planning Exercise

Think your will covers everything? In our latest podcast, Aaron Hector explains why it might not—and how to fix it.

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 I’ve often said that in Canada, when I see all these people’s finances, they don’t do good estate planning versus bad or bad versus good. They don’t do any. There is no estate planning being done by the vast majority of Canadians. I think you’ll really help our listeners by just walking them through why you do that basic exercise and what it is.

So it starts with having a crisp net worth statement that lists every account you have and, and I mean every account, like bank accounts, investment accounts, RRSPs, TFSAs, you go down the whole list, properties, et cetera, cars.

And then for each one, so you list the account, you list the balance. For each one, make three columns. And in column one, it’s joint tenancy. So is the account or the vehicle or the house held in joint tenants and if it is, and like with your spouse, if it is when you pass away, your spouse is the surviving joint tenant ownership transfers to them.

It’s, and it’s easy. It doesn’t end up in your estate and your will has no jurisdiction over that. That’s important. Then look at your registered accounts. And then look at your registered accounts. Have you named a beneficiary? Have you named your spouse as a beneficiary? If you have, then again, it goes directly to them and it your will has no jurisdiction over it.

Um, and it doesn’t form part of your estate. And not held up in probate. And then what’s left after you’ve kind of identified those two areas is the stuff that you own, uh, on your own. So you’re the only person on the account, or you know, the only person where a vehicle is registered, and that is what ends up in your estate.

That’s what your will has jurisdiction over. That’s what’s gonna fall into probate. So. It’s, it’s a really useful exercise because you see it line by line by line, how it works, and then once you see those things that are still ending up in the estate, you can start analyzing that and you say, well, is there any reason why this account couldn’t be held in joint tenants or this vehicle when we go to renew the registration, why don’t we both go in and get the second spouse added to the car? Um, so, and, and, and getting the clarity around this is important because I think a lot of people, they draft a will and they just kind of assume that everything’s gonna fall into it. But if you hold most things jointly or have named beneficiaries on accounts, the will on the first spouse to pass it might not do a whole lot.

Um, so it’s just a matter of having clarity. And once you have clarity, you can make decisions. You can, um, change the registration of accounts to streamline, to make it easier for your surviving spouse who’s gonna be grieving and probably doesn’t need a whole bunch of extra, you know, pain in the butt administrative paperwork to do.