Estate Planning Series

Is Your Estate Ready?
Simple Steps to Protect Your Legacy

A practical guide to reducing taxes, avoiding probate delays, and making things easier for your loved ones.

5-minute read

Documentation & Recordkeeping: The Foundation of a Smooth Estate

One of the most overlooked, yet most impactful, steps in estate planning is simply having an organized, up-to-date record of all your financial accounts. This includes registered accounts (TFSAs, RRSPs, RRIFs), non-registered investment accounts, bank accounts, pension plans, insurance policies, and any real estate or other significant assets you hold.

When you pass away, your executor and family members will be responsible for locating and managing everything you own. Without a clear roadmap, this process can stretch from months into years — creating unnecessary stress, delays, and costs at an already difficult time. A simple, well-maintained file, whether digital or physical, that lists all accounts, institutions, account numbers, and login credentials (stored securely) can make an enormous difference.

Equally important: make absolutely certain your executor knows where this file is located and how to access it.

We recommend reviewing and updating this document at least once a year, or after any significant change — a new account, a closed policy, a change of institution. Think of it as a gift of clarity to the people you care about most.

Review Your Beneficiary Designations: Registered Accounts

If there is one action on this list with the greatest potential tax and administrative impact, it is reviewing the beneficiary designations on your registered accounts — particularly your TFSA, RRSP, and RRIF.

When you name a beneficiary directly on a registered account, the funds are paid to that person upon your death without passing through your estate. This has two significant advantages: it speeds up the payout considerably, often within weeks rather than months, and it bypasses the probate process entirely, which can save your estate meaningful dollars in fees and delays.

For a TFSA, naming your spouse or common-law partner as a "successor holder" (rather than simply a beneficiary) is the most tax-efficient option: they inherit the entire TFSA as their own — including your contribution room — completely tax-free.

For an RRSP or RRIF, naming your spouse or common-law partner allows for a tax-deferred rollover into their own registered plan. If the beneficiary is not a spouse, the full fair market value of the plan is included as taxable income on your final return — which can result in a significant tax bill. It is important that your estate retain enough liquidity to cover these taxes, as the CRA can pursue beneficiaries directly if the estate lacks sufficient assets to pay.

Beneficiary designations should be reviewed after every major life event: marriage, divorce, the birth of a child, or the death of a previously named beneficiary. An outdated designation — including a former spouse — can have serious unintended consequences.

A Newer Strategy: The Joint Gift with Beneficial Right of Survivorship (JGBRS)

For clients with non-registered investment accounts, there is a relatively newer account structure worth knowing about: the Joint Gift with Beneficial Right of Survivorship (JGBRS) account, available through select investment dealers including RBC Dominion Securities.

In a JGBRS account, you hold the account jointly with one or more "successor accountholders", these can be a spouse, children, grandchildren, siblings, or other individuals you choose. You retain full control and management of your investments during your lifetime. Upon your death, the assets transfer directly to the successor accountholders bypassing the estate and the probate process entirely.

This can be an efficient and cost-effective way to pass non-registered wealth to your chosen beneficiaries, often dramatically reducing the time it takes for them to receive their inheritance compared to the traditional estate settlement process, which can take a year or more.

Please note: this account type is available to residents of all provinces except Quebec, and minors cannot be named as successor accountholders.

This is a relatively new tool and many clients are not yet aware of it. We encourage you to reach out if you would like to discuss whether a JGBRS account is appropriate for your situation.

Final Thoughts: Is there enough to cover final taxes & expenses?

While strategies like named beneficiaries and JGBRS accounts are excellent tools for passing assets efficiently and outside of probate, it is essential to ensure that your estate retains enough liquidity to cover your final obligations.

These can include your final income tax return (including any tax triggered by the deemed disposition of your RRSP or RRIF), probate fees on assets that do pass through the estate, legal and executor fees, and any outstanding debts or expenses. If your estate does not have enough cash to cover these costs, your executor may be forced to sell investments at an inopportune time or your beneficiaries could be held liable for unpaid taxes related to registered account proceeds they received.

A good rule of thumb: before moving all non-registered assets into a JGBRS or joint account structure, work with your advisor to model the estimated taxes and costs on your final return. Leave an appropriate buffer in a solely owned account to cover them comfortably.

Estate Planning Strategies at a Glance

A summary of the four key strategies covered in this article and their primary benefits.

Ready to Review Your Estate Plan?

We would be happy to walk through any of these strategies with you including whether a JGBRS account makes sense for your situation. Please reach out to schedule a time.

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