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Steven Alexander CPA Inc.accounting. advisory. growth.
Resources · Estate planning process
Estate planning · British Columbia

Your estate plan, one stage at a time.

Most people think estate planning means “get a will.” The will is one stage out of eight, and it’s rarely the one that goes wrong. What goes wrong is a stale beneficiary form, a joint account nobody thought about, or an estate that owes the CRA six figures and holds nothing anyone can sell. Here is the whole process, in order, with a checklist you can print.

The one idea to hold onto

Canada has no estate tax and no inheritance tax. What it has instead is a rule that treats you as having sold everything you own at fair market value the moment before you die.

So the bill your family faces isn’t a tax on your wealth. It’s a tax on your growth — and it lands on one tax return, in one year, all at once, whether or not anything was actually sold.

That single rule — the deemed disposition in section 70(5) of the Income Tax Act — explains most of what makes Canadian estate planning different from what you’ll read on American websites. There is no exemption amount to stay under. There are no bypass trusts to build. The question is never “is my estate big enough to be taxed?” It’s “what has gone up in value, how much tax will that trigger, and will there be cash on hand to pay it?”

The rest of estate planning is plumbing: making sure the right assets reach the right people, that someone has legal authority to act when you can’t, and that the person you appoint can actually find everything. None of it is complicated on its own. It just has to be done in a sensible order, because each stage depends on the one before it.

Below is that order. Eight stages, then a checklist. Read it once to see the shape of the thing, then work the checklist at whatever pace suits you.

Before you start

Nobody does this alone — and nobody does it all.

Estate planning sits across four desks. Knowing which desk a question belongs on saves a surprising amount of time and money.

Stage 1–2

You

Only you can say what you want to happen, who you trust, and what “fair” means in your family. No professional can supply those answers, and every other decision waits on them.

Stage 1, 6

Your CPA

Builds the statement of net worth, estimates the tax triggered at death, finds the liquidity gap, and coordinates the estate’s tax filings afterward. This is our part of the table.

Stage 3–4

A wills & estates lawyer

Drafts and executes the will, the enduring power of attorney, and the representation agreement, and advises on trusts. We don’t draft these — a lawyer must, and a badly drafted one is worse than none.

Stage 5–6

Your advisor or insurance broker

Holds the beneficiary designations, and sources the insurance that turns a tax bill into a cheque rather than a forced sale of the cottage or the company.

The gap is usually coordination. Each of these people does their piece well and assumes someone else is watching the whole. That’s how a will gets drafted around assets that a beneficiary form already sent somewhere else. Someone has to hold the full picture — and because the full picture starts as a balance sheet, that job tends to land with the accountant.

The process

Eight stages, in order.

Vanguard, Schwab, Fidelity, People’s Law School and Sun Life all sequence this slightly differently, but they converge on the same skeleton. Here it is with the Canadian and BC rules filled in.

01

Build the balance sheet

Mostly your CPA

Everything downstream depends on a complete list of what you own and owe. Not a rough idea — a written statement of net worth, with four columns beside each asset that most net-worth statements leave out:

  • How it’s owned — sole name, joint tenancy, tenancy in common, or held by a corporation. This determines whether the asset passes under your will at all.
  • What you paid (adjusted cost base) and what it’s worth now. The gap between those two numbers is the tax bill in stage 6.
  • Who’s named on it — the current beneficiary or successor holder on every registered plan, pension and insurance policy.
  • Where the paperwork lives — institution, account number, and how your executor would find it.

Do the liabilities in the same pass: mortgages, lines of credit, shareholder loans, and any personal guarantees you’ve signed. A guarantee nobody knew about is a nasty surprise for an executor.

Why this is step one and not step three. Until ownership form is written next to each asset, you cannot see which assets your will actually controls — and that’s the single most common flaw in otherwise decent estate plans.
02

Decide what you actually want to happen

Yours alone

With the balance sheet in front of you, the questions get concrete. Who receives what? Are you making specific gifts (the cabin to one child, the shares to another) or dividing the residue in shares? Does everyone receive their share outright, or is some of it staged by age, or held in trust?

Three situations deserve slower thought than they usually get:

  • Minor children. A gift to a minor doesn’t simply arrive — it has to be held for them, and if your will doesn’t say how, the default arrangements are rigid and expensive.
  • A beneficiary with a disability. An outright inheritance can disqualify someone from provincial disability benefits. A properly drafted discretionary trust usually doesn’t.
  • A beneficiary with creditor problems, an unstable marriage, or an addiction. Money left outright is money exposed.
A BC-specific constraint. Under section 60 of the Wills, Estates and Succession Act, a spouse or child who was not adequately provided for can apply to have the will varied by the court — and the court will order what is “adequate, just and equitable.” BC has the broadest wills-variation regime in Canada. If you plan to treat children unequally, or to leave a child out, tell your lawyer early and document your reasons.
03

Pick your people — and a backup for each

Yours, with advice

Four distinct roles, often filled by different people, each needing a named alternate:

  • Executor — administers the estate after death. Ask them first. It is a real job, often a year or more of work, and someone who quietly declines later leaves you effectively without one.
  • Attorney under an enduring power of attorney — handles your financial and legal affairs if you lose capacity.
  • Representative under a representation agreement — handles your health and personal care.
  • Guardian for minor children, and, if it matters to you, for pets.

Watch for conflicts. An executor who is also a beneficiary is normal and usually fine; an executor who is one of two business partners fighting over the shares is not.

BC uses different names than Ontario. There is no “power of attorney for personal care” here — an enduring power of attorney in BC covers money only. Health and personal care authority comes from a representation agreement. If you’ve moved from another province, don’t assume your documents translate.
04

Have the documents drafted

A lawyer’s job

Four core documents, and the will is only one of them:

  • A will. In BC the will-maker must be 16 or older, and the will must be signed at its end in the presence of two witnesses who are both present at the same time and are 19 or older. A witness who is also a beneficiary voids the gift to them.
  • An enduring power of attorney for financial and legal affairs, worded to survive incapacity.
  • A representation agreement for health and personal care. A “section 7” agreement covers routine matters and has a lower capability threshold; a “section 9” agreement is broader and can include refusing life-supporting treatment — but it covers no financial authority at all.
  • An advance directive, if you want written instructions that speak directly to your care team.

If you own a business, add the shareholders’ or buy-sell agreement to this list. A will that leaves company shares to a spouse, and a shareholders’ agreement that requires the surviving partner to buy them, are two documents that need to be read together before either is signed.

Two BC rules worth knowing. Since WESA came into force on March 31, 2014, marriage no longer revokes an existing will in BC — the old rule caused too many accidental intestacies. But when a marriage or marriage-like relationship ends, gifts to and appointments of the former spouse are automatically revoked, and the rest of the will stands.
05

Align everything the will doesn’t control

The step most people skip

Your will governs the assets that flow through your estate. A great many of your assets don’t. They pass by designation or by survivorship, and they do it before the will is even read.

Go through every one of them and check the name on the form against what your will says:

  • RRSPs and RRIFs — is the spouse named as beneficiary, or as successor annuitant on the RRIF? They are not the same thing.
  • TFSAs — a spouse named as successor holder keeps the account tax-sheltered; a spouse named merely as beneficiary does not, and has to do extra paperwork within a deadline to get the same result.
  • Pensions, group plans and RESPs — including who becomes the RESP subscriber if you die.
  • Every life insurance policy, including the small ones through work.
  • Every jointly held account and property — confirm with the institution how it is actually registered, not how you remember setting it up.
The designation wins. If the form says one thing and the will says another, the form controls. This is how a will that divides everything equally among three children ends up giving one of them a $400,000 RRSP on top — while leaving the tax on that RRSP for the estate, and therefore for the other two, to pay.
06

Size the tax bill and find the cash

Your CPA

Now the balance sheet earns its keep. Take each asset, apply the rule that governs it at death, and total up what the final tax return will owe. The table in the next section walks through asset by asset. The short version:

  • Capital property is treated as sold at fair market value; half the gain is taxable at your marginal rate that year — which, stacked on top of everything else in one return, is often the top rate.
  • RRSPs and RRIFs are added to income at their full value unless they roll to a qualifying survivor.
  • Anything passing to a surviving spouse generally rolls over at cost and defers to the second death — which is exactly why the second death is usually the expensive one.
  • BC probate fees run about 1.4% above $50,000, on top of the income tax.

Then ask the question that actually matters: where does the cash come from? An estate whose value is a house, a cottage and private company shares can owe a great deal of tax and hold almost nothing liquid. The usual answers are life insurance sized to the liability, a deliberate cash reserve, or a planned sale — and insurance is the only one that arrives at exactly the right moment.

For business owners. This is where an estate freeze comes in: exchanging your growing common shares for fixed-value preferred shares so that the tax on death is capped at today’s number, with future growth accruing to the next generation or a family trust. It fixes the liability so it can be measured — and once measured, insured.
07

Store it where it can be found, and tell someone

Yours, quickly done

A perfect plan nobody can locate is not a plan. Three practical things:

  • Tell your executor where the original will is, and consider filing a wills notice with the BC Wills Registry so it can be found even if they forget. A photocopy is not a substitute for the original.
  • Don’t use a safety deposit box your executor can’t open without the very authority the will grants them. It happens more often than you’d think.
  • Deal with digital assets separately. BC has no legislation giving executors access to online accounts, and platform terms of service generally forbid handing over credentials. The practical route is to turn on the built-in legacy tools while you’re alive — Apple’s Digital Legacy, Google’s Inactive Account Manager, Facebook’s Legacy Contact — and keep an inventory of accounts, devices, domains and any crypto holdings somewhere your executor can reach.
Never put passwords in your will. Once a will is probated it becomes a public court document. Keep credentials in a password manager and leave instructions for accessing that.
08

Review it on a schedule — and on triggers

Everyone, briefly

A light look once a year and a proper review every three is a reasonable rhythm. But the calendar matters less than the events. Review immediately when any of these happen:

  • Marriage, a new common-law relationship, separation or divorce — yours or a beneficiary’s
  • A birth, adoption, or a death in the family — including of an executor, guardian or attorney
  • A significant change in wealth: a business sale, an inheritance received, a large gain or loss
  • A move to another province or country, or buying property in one
  • A change in health or capacity, yours or a fiduciary’s
  • Buying, selling or restructuring a business interest
  • A meaningful change in tax law

Most reviews take twenty minutes and change nothing. The one that matters is the one after the event you didn’t think counted.

Stage 6, in detail

What actually happens to each asset.

The deemed disposition is the default. Most of estate tax planning is knowing which assets escape it, and on what conditions.

Asset What happens on death The planning point
Non-registered investments, rental property, the cottage Deemed sold at fair market value. Half the accrued gain is taxable on the final return. The gain is measured from what you paid. Knowing the adjusted cost base is what makes the estimate possible at all.
Anything passing to a spouse or common-law partner Rolls over at cost. No tax on the first death, provided it vests indefeasibly in them (or a qualifying spousal trust) within 36 months. Deferral, not forgiveness. The whole bill lands on the second death — which is the one to plan for.
Your principal residence Deemed sold, but the principal residence exemption can shelter the gain for the years designated. Only one property per family unit per year can be designated. With a home and a cottage, someone has to choose which years go where.
RRSP / RRIF The entire account value is added to income on the final return — unless it goes to a qualifying survivor. Usually the largest single line on the final return. A spouse named as beneficiary can transfer it; a spouse named successor annuitant on a RRIF simply continues the plan.
TFSA Value at the date of death is tax-free either way. What differs is what happens after. A spouse as successor holder keeps the account sheltered permanently. A spouse as beneficiary must use a separate election within a deadline, and post-death growth is taxable.
Life insurance Death benefit is received tax-free and, where a beneficiary is named, bypasses the estate and probate entirely. The cleanest way to deliver cash exactly when the tax is due. Corporately owned policies can also credit the capital dividend account, letting the proceeds flow out to shareholders tax-free.
Private company shares Deemed sold at fair market value — which requires a valuation, and generates tax on an asset nobody can readily sell. The classic liquidity trap. An estate freeze caps the number; insurance funds it; a buy-sell agreement says who buys.
Assets with a named beneficiary or held in joint tenancy Pass outside the estate. Not subject to probate fees — but the income tax they trigger usually still lands on the estate. The mismatch that causes fights: one person gets the asset, everyone else pays the tax on it.

The capital gains inclusion rate is one-half. The proposed increase to two-thirds was deferred and then cancelled in March 2025, and was never enacted.

And then, separately

BC probate fees.

Charged on the value of the estate that passes through the hands of your executor — a separate levy from income tax, and a much smaller one.

Value of the estate Fee
First $25,000Nil
Portion from $25,000 to $50,000$6 per $1,000
Portion above $50,000$14 per $1,000
Court filing fee (estates over $25,000)$200

Roughly 1.4% at the top end — about $28,000 on a $2 million estate. Worth planning around, but not worth distorting the whole plan for. The income tax triggered by the deemed disposition is usually several times larger.

Stage 1 · the part everyone stalls on

A statement of net worth, already set up for this.

Ordinary net-worth templates track what you own and owe. This one adds the four columns estate planning actually needs — ownership form, adjusted cost base, current value, and the beneficiary currently named — and estimates the deemed-disposition tax as you fill it in.

Free to download and use on your own. If you’d rather not do it alone, building these and pricing the tax at death is ordinary work for us.

Download the worksheet
What actually goes wrong

Six failures that show up again and again.

Almost none of them involve a badly drafted will.

The designation nobody updated

An RRSP form filled out in 1998 still names a former spouse, or one child out of three. The form beats the will, every time.

Fix: read every designation out loud against the will, once, in one sitting.

Joint tenancy with an adult child

Added to title to save probate fees. But the Supreme Court of Canada held in Pecore that a gratuitous transfer to an adult child is presumed to be held in trust for the parent’s estate — so the survivorship may not happen. Meanwhile the property is exposed to the child’s creditors and to their spouse on a relationship breakdown.

Fix: if you do it, do it deliberately, with legal advice and written evidence of intention.

Tax owing, nothing liquid

A house, a cottage and company shares. A large deemed disposition. No cash. The executor sells something in a hurry, at a bad price, to pay the CRA.

Fix: estimate the number in advance, then decide how it gets funded.

The executor can’t find anything

No inventory, no advisor contacts, accounts at five institutions, and an original will in a box the bank won’t open without a grant of probate.

Fix: stage 1 and stage 7. Both are unglamorous and both take an afternoon.

Distributing before the clearance certificate

An executor who pays out the estate before the CRA confirms everything is settled becomes personally liable for the shortfall, up to the value of what was distributed.

Fix: request the clearance certificate on Form TX19, and don’t let family pressure shortcut it.

Nobody was told

Unequal shares that were carefully considered land as a shock in a lawyer’s office six weeks after a funeral. In BC, an aggrieved spouse or child has 180 days from the grant to start a wills-variation claim.

Fix: where you can bear it, explain your reasoning while you’re alive.

Work it at your own pace

The checklist.

Forty-four items across the eight stages. Tick them off here, or print the page and do it on paper — ticks aren’t saved when you leave.

0 of 44 done

01 Build the balance sheet

One document listing everything, with ownership and cost beside each line.

02 Decide what you want to happen

The part no professional can do for you.

03 Pick your people

Every role gets a named alternate.

04 Get the documents drafted

A wills & estates lawyer drafts these. Bring stages 1–3 to the first meeting.

05 Align what the will doesn’t control

The highest-value hour in the whole process.

06 Size the tax and find the cash

Your CPA’s part of the table.

07 Store it and tell someone

Fast, and disproportionately valuable.

08 Review

Set it once so it happens without you remembering.

Nothing you tick is stored or sent anywhere — it lives in this browser tab only. Print the page for a copy you can keep.

Quick answers

Common questions.

Is there an estate tax or inheritance tax in Canada?

No. Canada does not levy an estate tax or an inheritance tax, and beneficiaries do not pay tax on what they receive. What happens instead is that the Income Tax Act treats you as having sold everything you own at fair market value immediately before death. The resulting capital gains, plus the full value of any RRSP or RRIF that does not roll to a qualifying survivor, land on your final personal tax return — and the estate pays that bill before anyone inherits.

Does a beneficiary designation override my will?

Yes, and this catches people constantly. In BC, a valid beneficiary designation on an RRSP, RRIF, TFSA, pension or life insurance policy sends that asset straight to the person named on the form. The will never touches it. If your will says everything is split equally among three children but an old RRSP form still names one of them, that child receives the RRSP on top of their third — and the estate, not that child, is usually left with the tax bill on it.

How much are probate fees in British Columbia?

BC charges nothing on the first $25,000 of estate value, $6 per $1,000 on the portion between $25,000 and $50,000, and $14 per $1,000 on everything above $50,000, plus a $200 court filing fee where the estate exceeds $25,000. That works out to roughly 1.4% at the top. On a $2 million estate the fee is in the neighbourhood of $28,000 — real money, but usually far smaller than the income tax triggered by the deemed disposition, which is why probate-fee avoidance should never drive the whole plan.

Should I put my adult child on title to my house to avoid probate?

Be very careful. The Supreme Court of Canada held in Pecore v. Pecore that when a parent gratuitously puts an adult child into joint ownership, the law presumes the child holds the interest in trust for the parent’s estate — so the survivorship you were counting on may not happen without clear evidence of your intention.

Beyond that, the property becomes exposed to your child’s creditors and to a claim by their spouse on relationship breakdown, you lose sole control, and adding a joint owner can itself trigger a partial disposition for tax purposes. The probate fee saved is often the smallest number in the equation.

What happens if I die in BC without a will?

The Wills, Estates and Succession Act decides for you. If you have a spouse and no descendants, the spouse takes everything. If you have both, the spouse receives household furnishings plus a preferential share — $300,000 where all your descendants are also the spouse’s, or $150,000 where any are not — and the residue is then split half to the spouse and half among the descendants.

With no spouse, the estate passes down a fixed order of relatives and stops at the fourth degree of relationship. Someone also has to apply to the court to be appointed, which is slower and more expensive than acting on a named executor’s authority.

Does getting married cancel my existing will in BC?

Not any more. Under the old Wills Act a later marriage revoked a prior will, and that rule caused a lot of accidental intestacies. WESA deliberately did not carry it forward, so since March 31, 2014 marrying does not revoke your BC will.

The opposite event does have an effect: when a marriage or marriage-like relationship ends, gifts to and appointments of the former spouse are revoked and they are treated as having died before you, while the rest of the will stands. Either way, a change in relationship status is a reason to review the will, not to assume it took care of itself.

How often should I review my estate plan?

A light annual look and a proper review every three years is a defensible rhythm, but the triggers matter more than the calendar. Review immediately on marriage, separation or divorce, a birth or adoption, the death of a spouse, beneficiary, executor or guardian, a significant change in wealth such as a business sale or inheritance, a move to another province or country, a change in anyone’s health or capacity, buying or selling a business interest or real property, and any meaningful change in tax law.

Why does an executor need a clearance certificate?

Because without one the executor is personally on the hook. If a legal representative distributes the estate before the CRA confirms all income tax and GST/HST, interest and penalties have been paid, that representative is personally liable for the unpaid amounts up to the value of what they handed out.

The clearance certificate, requested on Form TX19, moves that liability off the executor and onto the estate and the beneficiaries who received the assets. It is one of the main reasons estates take longer to wind up than families expect.

Where this comes from

Primary sources.

Everything technical on this page traces back to one of these. Figures change — check the source before relying on a number.

Reviewed by Steven Alexander, CPA · Updated

When you’re ready to start

Stage one is a spreadsheet. We’re good at those.

We build the statement of net worth, put a number on the tax your estate would owe today, and hand you and your lawyer a picture you can both plan against. Then we stay in the loop as it changes.

Book a 30-min chat Send us an email
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