Many Canadians put off preparing a will because they believe wills are only necessary for wealthy families or older adults. In reality, a will is an important part of responsible financial and family planning. It can help explain your wishes, identify the person responsible for administering your estate and reduce uncertainty for your loved ones.
Although wills are governed mainly by provincial and territorial law, the basic purpose is similar across Canada: a will records how you want certain property handled after your death. For Alberta residents, the provincial government recommends that every adult have a will, a personal directive and an enduring power of attorney.
What is a will?
A will is a legal document that allows you to provide instructions for distributing estate property after death. It can also name a personal representative, commonly called an executor, to manage the estate and carry out those instructions.
In Alberta, a will may also allow a parent to nominate a guardian for minor children. This does not necessarily mean the court must accept the nomination in every situation, but it gives the court and family members important information about the parent’s wishes.
Alberta recognizes different types of wills, including a formal will and a holograph will. A formal will is generally written, signed by the will-maker and signed by two witnesses in the will-maker’s presence. Because legal requirements can be technical, consulting a lawyer is recommended when preparing or changing a will.
What happens if you die without a will?
A person who dies without a valid will is commonly described as having died “intestate.” In Alberta, the Wills and Succession Act and related legislation determine how the estate is distributed and who may be given preference to apply to administer it.
This means the distribution may not reflect your personal wishes. Depending on your family circumstances, assets may pass according to statutory rules rather than to a particular friend, charity, stepchild or other person you intended to support. If there is no suitable person ready to administer the estate, family members may need to apply to court for authority.
Dying without a will can also create uncertainty about who will deal with financial institutions, identify assets, pay debts and communicate with government agencies. The process may be more complicated when there are blended families, dependants, business interests, property in different provinces or assets located outside Canada.
How a will supports practical estate administration
Choosing a personal representative
Your personal representative is responsible for important tasks such as locating the will, gathering information about assets and debts, dealing with financial institutions, paying valid expenses and distributing estate property. Choosing someone trustworthy, organized and capable of handling these responsibilities can make the process easier for beneficiaries.
Coordinating family and beneficiary wishes
A will can provide instructions for specific gifts, charitable donations and the distribution of the remaining estate. It can also include arrangements for property intended for minors. However, a will should be reviewed together with beneficiary designations on registered plans, insurance policies and investment accounts. Those designations may affect whether an asset passes through the estate.
Supporting business continuity
Business owners should consider what will happen to shares, partnership interests, business loans, guarantees and other commercial obligations. A will alone may not resolve every business issue, but it is an important part of coordinating personal estate planning with corporate documents, shareholder agreements, insurance and a succession plan.
Wills and Canadian tax considerations
A will does not eliminate tax obligations. When someone dies, the legal representative generally must file a final T1 Income Tax and Benefit Return for the deceased. The estate may also need a T3 Trust Income Tax and Information Return if it earns income after death or holds property during administration.
The Canada Revenue Agency explains that a person is generally considered to have disposed of capital property immediately before death. This deemed disposition can create capital gains or losses involving assets such as real estate, investments, business property and valuable personal belongings. Certain transfers to a qualifying surviving spouse or common-law partner may receive tax-deferred treatment when the applicable requirements are met.
Because tax balances may remain outstanding, a personal representative should be careful before distributing estate property. The CRA’s clearance certificate process can help confirm that amounts owed to the CRA have been paid or secured before final distribution. Professional tax advice is particularly important where the estate includes a corporation, rental property, private investments, foreign assets or registered retirement plans.
A will is only one part of an estate plan
A will applies after death. It does not generally authorize someone to make personal or financial decisions while you are alive but unable to act. In Alberta, a personal directive can appoint an agent to make personal decisions, such as decisions about living arrangements or medical treatment. An enduring power of attorney can appoint someone to make financial and legal decisions.
These documents should be coordinated. You should also maintain an up-to-date list of important accounts, insurance policies, property, business records, digital assets and professional contacts. Keep the original will in a secure and accessible location, and tell your personal representative how to locate it. Alberta does not have a general will registry, so document storage and communication are important.
When should you review your will?
Review your will after major life events, including marriage, separation, divorce, the birth or adoption of a child, the death of a beneficiary, a significant change in assets or a move to another province. Alberta also recommends reviewing a will regularly because laws and personal circumstances can change.
Preparing a will is an important step toward protecting your family, organizing your affairs and reducing avoidable confusion. UMA Accounting can help you understand the tax and financial considerations that may affect your estate plan. Contact UMA Accounting for professional support with personal tax planning, business interests and estate-related tax matters, and consult a qualified lawyer for legal advice about preparing or changing your will.
Sources: Government of Alberta: Wills in Alberta; Government of Alberta: Deceased Persons’ Estates; Canada Revenue Agency: Prepare tax returns for someone who died; Canada Revenue Agency: Taxable capital gains on property, investments and belongings; Canada Revenue Agency: Apply for a clearance certificate.
Disclaimer: This article is provided for general informational purposes only and does not constitute personalized accounting, tax, financial or legal advice. Tax laws and government guidance may change, and their application depends on individual circumstances. Review current guidance from the relevant Canadian government authority or consult a qualified professional before making tax or financial decisions.
This article was prepared with AI-assisted research. Although official Canadian government sources have been prioritized, readers are encouraged to review the linked government guidance and confirm that the information remains current and applies to their circumstances.
