If someone dies without a will in Canada, his or her estate will be divided by the provincial government through a process known as probate. What this can mean is that a person’s assets will not go to the beneficiary the individual may have desired, but will be distributed according to a formula. The best way to avoid this and ensure that the intended beneficiaries receive the assets is through estate planning and the drafting of a will.
Depending on the circumstances, it may make practical and financial sense to set up a charitable legacy. One of the main benefits of naming a charitable beneficiary is that the ongoing donations can be used to offset taxes. In addition, the testator, or person who has made the will, has the opportunity to help a charity of his or her choice.
In general, the more assets a person owns, the more important it is to plan for the future and secure assets for beneficiaries. A simple will may not provide the asset protection needed. In addition to a will, estate planning may include trusts, charitable legacies and living trusts.
A lawyer with a background in estate planning could evaluate a person’s assets and discuss his or her goals and wishes. After a thorough evaluation, the lawyer may present a plan for the estate that secures and protects the individual’s assets on behalf of the testator and intended beneficiaries. Once the plan is developed, the lawyer could take the necessary steps to execute the plan, including establishing trusts, designating an executor or trustee and creating a will.
Source: Canadian Red Cross, “Will Planning Guide“, November 09, 2014