Most Canadians know, in a vague and distant way, that they should have a will.

They also know they should floss daily, exercise more consistently, and schedule the medical appointment they have been putting off for two years. The will sits on the same mental list: important, not urgent, endlessly deferrable.

This particular deferral is different from the others, though. Not because death is more certain than bad teeth or an untreated condition, but because the consequences of dying without an estate plan do not fall on you. They fall on the people you love, at the moment they are least equipped to handle them, in the immediate aftermath of losing you.

This post is not about mortality. It is about what Canadian law does with your money, your home, your accounts, and your assets when you die without leaving instructions, and it is about why the default outcome, in almost every case, is significantly worse than a simple, documented plan would have produced.

The legal term is intestacy, and it is more common than you think

When a person dies without a valid will in Canada, they are said to have died "intestate." Their estate and everything they owned at the time of death is then distributed according to provincial intestacy legislation, which varies by province but follows a broadly consistent set of rules.

These rules were designed to produce fair outcomes for the average family in average circumstances. What they were not designed to do is honor individual preferences, account for family complexity, minimize tax, protect vulnerable beneficiaries, or reflect the specific relationships and intentions of the person who died.

This matters more in practice than most people realize, because the average Canadian family in 2025 is considerably more complex than the average assumed by intestacy legislation. Blended families, common-law partnerships, dependent adult children, estranged relatives, business interests, cross-border assets, none of these fit neatly into a formula written for a simpler demographic reality.

According to surveys, approximately 51% of Canadians do not have a current, valid will. A significant portion of these are in their 30s and 40s, people who have accumulated real assets, built families, and entered financial commitments whose disposition, at death, will matter enormously to the people left behind.

What intestacy rules actually do by family situation

The specific outcome of dying intestate depends on your province and your family circumstances. The following reflects the general pattern across most Canadian provinces, using Ontario as the primary reference point, though the principles are broadly consistent.

If you are married with children

In Ontario, the first $350,000 of the estate goes to the surviving spouse as a "preferential share." Anything above that is divided: one-third to the spouse, two-thirds to the children in equal shares.

This sounds reasonable until you consider a few real-world scenarios:

If your primary asset is a family home worth $800,000 and you have limited liquid assets, your spouse inherits $350,000 plus one-third of the remaining $450,000 (approximately $500,000). The other $300,000 goes to your children. Your spouse cannot access the children's share. If she needs to sell the home to access the estate's value, she may be legally required to account for the children's portion in the proceeds, creating administrative complexity and potential family conflict at the worst possible moment.

If your children are minors, their share of the estate does not go to your spouse to manage on their behalf. It goes into a court-administered trust, managed by the Office of the Children's Lawyer, until each child turns 18. At 18, the full amount is released to them outright, regardless of financial maturity, regardless of your intentions for how the money should be used.

If you are in a common-law relationship

This is where intestacy produces its most severe outcomes. In most Canadian provinces — including Ontario. Common-law partners have no automatic inheritance rights under intestacy legislation. None.

If you die without a will and your primary relationship is common-law, your partner may inherit nothing from your estate regardless of the length of the relationship, the nature of your financial entanglement, or the depth of your mutual commitment. Your estate goes, instead, to whatever relatives are next in line under provincial rules - parents, siblings, nieces, nephews, people you may have been estranged from, people you may never have intended to benefit, people who were, in many cases, far less central to your life than the partner you shared it with.

Your common-law partner may have legal recourse through a dependent's relief claim, but this involves litigation, legal fees, time, and the profound indignity of asking a court to award them what you would have given them willingly if you had simply signed a document.

If you are single with no children

Your estate passes to your parents if they are living. If both parents are deceased, it passes to your siblings in equal shares. If you have no siblings, it passes to nieces, nephews, and progressively more distant relatives according to a defined hierarchy.

If you have friends you consider family, causes you care about, a partner who did not meet the legal definition of spouse, or simply preferences about where your assets go — none of that matters. The law distributes your estate according to biological and legal relationships, not actual ones.

The RRSP and RRIF collapse: the tax bill nobody planned for

Beyond the distribution of assets, dying without a proper estate plan in Canada can produce a tax outcome that permanently reduces the value of the estate before the beneficiaries receive anything.

Here is what happens to your RRSP or RRIF at death:

If you have named your spouse or common-law partner as beneficiary on your RRSP or RRIF, the account transfers to them directly, tax-deferred, as a "spousal rollover." No tax is triggered at the time of transfer. The surviving spouse eventually pays tax on withdrawals from the inherited plan, but at their rate and on their schedule — typically manageable.

If your RRSP or RRIF does not have a named beneficiary — or if it names your "estate" as beneficiary — the entire account balance is added to your income in your final tax return. At the highest marginal rates in Ontario, this means approximately 53.5% of the account balance is paid to the CRA before anything reaches your beneficiaries.

A $300,000 RRSP without a named beneficiary could result in a tax bill of approximately $160,000 in the year of death — a bill that must be paid from estate assets before distribution, potentially forcing the sale of other assets to cover it.

This is not a loophole or an obscure technicality. It is one of the most significant financial consequences of inadequate estate planning in Canada, and it is entirely avoidable with two actions: naming a beneficiary directly on the RRSP or RRIF, and updating that beneficiary designation whenever circumstances change.

Probate: the public, slow, expensive alternative to a good estate plan

When you die with a will, your estate typically goes through a legal process called probate — the court's confirmation that the will is valid and that the executor has authority to act. Probate is not free (probate fees in Ontario are approximately 1.5% of the estate value above $50,000), but it is generally manageable, and a well-structured estate plan can reduce the assets subject to probate significantly.

When you die without a will, probate becomes considerably more complicated.

Without a named executor, the court must appoint an estate administrator, typically the next of kin, but potentially a court-appointed trustee if family members cannot agree or are unavailable. This administrator must post a bond, obtain court approval for most decisions, and navigate a process that is slower, more expensive, and more publicly scrutinized than the administration of a well-planned estate.

The practical consequences include:

Delay. Assets in a complex intestate estate can be frozen for months — sometimes well over a year — while the administration process works through the courts. During this period, the family may not have access to funds, even for immediate needs.

Cost. Legal and administrative fees for intestate estates are consistently higher than for testate (will-based) estates of comparable value. The savings from not having written a will are typically eclipsed many times over by the additional cost of administering the estate without one.

Loss of privacy. Wills that go through probate become public documents. In some provinces, the estate inventory — a detailed record of everything you owned — also becomes part of the public record. Anyone can see it. This is not a concern for simple estates, but for those with business interests, complex family situations, or simply a preference for privacy, it is a meaningful consideration.

What about life insurance? Isn't that enough?

Life insurance is one of the most common reasons people feel adequately protected without a will. If the policy has a named beneficiary, the proceeds pass directly to that person outside of the estate, bypassing probate entirely. This is correct and genuinely valuable.

But life insurance does not solve the estate plan problem. It addresses one specific asset (the policy), while leaving everything else unresolved. Your home, your bank accounts, your TFSA, your RRSP, your personal property, your business interests, and your digital assets still require a will and beneficiary designations to be handled according to your intentions.

Life insurance is a component of a complete estate plan. It is not a substitute for one.

The three documents that form the minimum viable estate plan

A complete estate plan involves several documents and potentially complex tax and legal strategies. But the minimum viable version, the floor below which no Canadian adult with meaningful assets or family obligations should fall, consists of three documents.

1. A valid, witnessed will

A will names an executor (the person responsible for administering your estate), distributes your assets according to your specific intentions, names guardians for minor children, and can include instructions for trusts, charitable bequests, specific personal property, and any other provisions relevant to your situation.

A will can be a simple document for a straightforward situation, or a detailed one for complex circumstances. What matters is that it exists, that it is valid (signed and witnessed according to provincial requirements), and that it is current — reflecting your actual assets and relationships at the time of your death, not those of a decade earlier.

2. A Power of Attorney for Property

This document names someone to manage your financial affairs if you are alive but incapacitated — through illness, accident, or cognitive decline. Without it, no one has legal authority to pay your bills, access your accounts, or manage your assets on your behalf without going through a court process to have a guardian or trustee appointed.

This is not an estate planning document in the strict sense — it applies during your life, not after it. But it is the document most commonly absent from the financial plans of Canadians in their 30s and 40s, and its absence is most costly precisely during the decades when an unexpected health event is most financially disruptive.

3. A Power of Attorney for Personal Care (Healthcare Directive)

This document names someone to make medical decisions on your behalf if you cannot make them yourself, and can specify your wishes regarding life-sustaining treatment, organ donation, and other healthcare decisions. Without it, medical teams must consult with whoever is present and willing — which may or may not be the person you would have chosen, and may or may not result in decisions aligned with your values.

The beneficiary designation problem

Alongside these three documents, one of the most impactful and most overlooked estate planning actions available to any Canadian is a thorough review and update of beneficiary designations on:

• All registered accounts (TFSA, RRSP, RRIF)
• All life insurance policies
• Any workplace pension or group benefits

Beneficiary designations override the will entirely. If your will leaves your estate equally to your two children, but your RRSP beneficiary designation names only one of them from a form filled out fifteen years ago, the RRSP goes to that one child. The will is irrelevant to it.

This creates the most common unintentional outcome in Canadian estate administration: assets distributed in a way that does not reflect the deceased's actual wishes, not because of legal complexity or family conflict, but because a form was filled out in a different season of life and never revisited.

The review of beneficiary designations is a task that takes approximately one to two hours and costs nothing. It should happen immediately after any significant life event: marriage, divorce, the birth of a child, a bereavement, a significant change in financial circumstances, and as a general matter every three to five years regardless of whether a specific trigger has occurred.

What an estate plan actually costs versus what dying without one costs

The most common reason for not having a will is some combination of cost, inconvenience, and the psychological discomfort of contemplating mortality. It is worth addressing the first of these directly, because it is the most factually inaccurate.

A basic will in Canada, prepared by a wills and estates lawyer for a relatively straightforward situation, typically costs between $300 and $1,000 depending on complexity and province. A more complex estate plan, involving trusts, business succession, or cross-border assets, may cost $2,000 to $5,000 or more.

Compare this to the cost of dying without one:

• Probate fees on an estate of $750,000 in Ontario: approximately $10,750
• Additional legal and administrative fees for intestate administration versus a well-planned estate: often $5,000 to $20,000 or more
• RRSP collapse tax if no beneficiary is named on a $300,000 account: approximately $160,000
• Family legal conflict over intestate distribution: potentially unlimited

The will does not merely express your wishes. It pays for itself many times over in the administrative, tax, and legal costs it eliminates.

The conversation most Canadians keep postponing

There is a version of the estate planning conversation that focuses on mortality and is therefore genuinely uncomfortable. There is another version that focuses on the people you care about and what you want their experience to be in an already difficult time — and this version is considerably easier to have.

You can either choose, clearly and in advance, who gets what, who manages things, who makes decisions on your behalf, and how your assets pass as efficiently as possible to the people and causes you care about.

Or you can leave all of those decisions to a provincial formula, a court-appointed administrator, and a CRA tax calculation that was not written with your specific family in mind.

Both paths lead to the same destination. Only one of them is a choice.

Estate planning is one of the areas where our advisors at Terces Finance work alongside clients to ensure their financial plan extends beyond their own lifetime, covering beneficiary designations, insurance structures for estate efficiency, and the integration of investment and estate strategies. If you would like to understand how your current financial plan addresses what happens after you, or to identify gaps that need closing

Book a free 20-minute consultation here. It is one of the most important conversations available to you, and one of the easiest to keep postponing.