Wills in Quebec: why one isn’t enough

The will. Most people know they should have one. Plenty don’t. And those who do often forget to update it. We understand — it’s easy to put this off, and daily life has a way of taking the front seat.

The problem is that by the time it becomes urgent, it’s usually too late to do it well.

Yes, a will is essential. No, it isn’t enough.

In Quebec, dying without a will means letting the Civil Code decide in your place. Who inherits what, in what order, in what proportions: all of it follows general rules that take no account of your situation or your wishes.

A notarial will resolves much of that problem. It takes effect immediately at death, with no probate required, which considerably simplifies matters for your loved ones at an already difficult time.

But it doesn’t cover everything. Taxation at death, protecting a spouse, coordinating with your investments and your insurance: all of that falls outside the scope of a will. And that’s often exactly where estates get complicated.

What many people overlook: tax at death

In Canada, death triggers what’s known as a deemed disposition of all your property. In practical terms, the tax authorities treat you as having sold all of your assets at the moment of death, which can generate a significant tax bill that has to be settled quickly.

RRSPs and RRIFs not rolled over to an eligible spouse are fully taxable. If the liquidity isn’t there, your heirs can end up selling assets under pressure to cover a bill that could have been anticipated.

Life insurance often covers that gap. But it has to be put in place well before the need arises. With age or a change in health, the options narrow.

Keeping your will current: a step that’s often skipped

A will drafted ten years ago may no longer reflect the life you’re living today. A new relationship, a birth, buying a business, the death of a named heir: life moves, and your will should move with it.

The Chambre des notaires du Québec recommends reviewing it after any major life change, and generally every three to five years. That’s a small amount of effort compared with the benefit of having your affairs in order.

Client case: estate planning for a blended family

Take the example of one client — an incorporated consultant, 52, divorced, and father of two children from a first marriage. He now lives in a common-law relationship and has a third child with his current partner.

His notary drafted a will suited to that family reality, protecting his common-law partner — who does not have the same rights as a married spouse — while ensuring an equitable division of assets among the three children and planning the transfer of his company’s shares to avoid estate disputes.

His wealth advisor, for his part, structured the investments around those objectives, assessed the potential tax at death and put an insurance strategy in place to preserve family assets, working in coordination with the notary and the tax specialist.

The result: his partner is protected, his children are treated equitably, and the transfer of his wealth and his business is planned efficiently.

What role does a financial advisor play in estate planning?

The notary drafts the will. The wealth advisor makes sure your financial assets line up with what that will provides for. Two distinct roles — but ones that work far better coordinated.

At Entourage Advisory, we can keep a copy of your important documents: will, power of attorney, protection mandate. In the event of a sudden death, our team can guide your loved ones step by step — what to do, in what order, who to contact — without them having to find their bearings while grieving.

To us, that’s part of complete wealth management.

“The availability of the Entourage team, the quality of their advice and their thorough understanding of our situation make them valuable allies. By far the best team of financial advisors I’ve had the chance to work with.”
— Edith P., semi-retired CPA, client for several years (Translated from French)

What we recommend you do now

• Make sure you have an up-to-date will. If you don’t have one, or if it’s more than five years old, that’s where this starts.
• Make sure your advisor and your notary can talk to each other. Your advisor can act as a resource throughout the process of drafting your will and planning your estate. They can point you toward the right experts and support your thinking.
• Give your advisor a copy of your important documents. Will, protection mandate, power of attorney: these need to be accessible quickly if something happens.
• And think about the tax impact of your estate before it becomes urgent. The best solutions take time to put in place properly, and your advisor has the tools to guide you.

The best estate is the one that surprises no one. Let’s talk.