Estate Planning

Estate planning covers many different areas, and includes:

  • making a will and keeping it up-to-date;
  • looking into strategies to reduce taxes;
  • considering issues related to insurance policies and personal savings; and
  • understanding how OMERS survivor benefits fit into the picture.

Your Will

  • A will is a legal document designating the distribution of your property and assets after you die. The person you appoint to carry out your wishes on your behalf (an executor) is also stated in the will.
  • A will provides instructions for how you want your assets (funds, property and personal effects) to be distributed after your death. It's the simplest way to ensure that your wishes are carried out.
  • If you die without a will (intestate), the courts will appoint an administrator to dispose of your assets according to rules in effect at the time of your death. This means the law decides how and who will receive your assets, regardless of your wishes or the needs of your family.
  • Do-it-yourself kits for wills are available, but if it doesn't comply with Ontario law, the will is invalid.
  • It's a good idea to consult a lawyer who is experienced in estate law to prepare your will for you.
  • Review your will periodically to be sure it still reflects your wishes and financial situation.

Other Methods of Transferring Your Assets

Although a will is central to any estate plan, other methods of transferring your assets include:

1. Testamentary Trust

  • A testamentary trust lets you transfer assets to beneficiaries, but the beneficiaries will not have control of the assets. Instead, the assets are controlled and managed by a trustee.
  • The creation of the trust is set out in the will.

2. Joint Ownership

  • This form of ownership allows two or more people to own an asset together.
  • On the death of one of the owners:
  • ownership automatically passes to the surviving owners (joint tenancy); or
  • part of the asset owned by the deceased is transferred according to their will (tenancy-in-common).

3. Gifting Assets Before Death

  • Gifting assets prior to death has a number of potential tax benefits and tax liabilities. For example, gifting can reduce probate taxes on your estate.
  • Also, by gifting you hand over all control of the asset.

4. Living/Family Trusts

  • Trusts have a wide application in estate planning, but can be a complex method of estate transfer.
  • A living trust is a relationship created during the trustee’s (the person who owns the assets) lifetime. A testamentary trust is created on the death of an individual.
  • Two of the many ways to use a trust include safeguarding assets if the beneficiaries are deemed incapable (due to young age, mental disability, or lack of business experience); or to provide for a child’s education.
  • It’s a good idea to consult a lawyer who is familiar with trust documents and estate planning.

OMERS Survivor Pension

  • Knowing how OMERS survivor benefits work is an important part of estate planning.
  • OMERS survivor pension:
    • is indexed to inflation; and
    • the spousal pension is paid for life, even if the surviving spouse remarries.
  • An eligible spouse will receive 66 2/3 of the lifetime pension you were receiving (or were entitled to receive) at the date of death, plus an additional amount for each eligible child.
  • If there is no eligible spouse, a retired member's eligible children, named beneficiary or estate may be eligible for a benefit.
  • OMERS entitlement to the survivor benefit is legislated; a will cannot change it.
  • The definition of an eligible spouse is also legislated. Know the rules, particularly if your marital status has changed since retiring.
  • More about OMERS survivor benefits.