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Preparing for the future: The importance of estate planning

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This article was published 06/06/2025 (410 days ago), so information in it may no longer be current.

Canada is currently undergoing the largest intergenerational wealth transfer in history, but more than half of us aren’t ready. A recent study by IG Wealth Management (IG) uncovered that 54 per cent of Canadians don’t have an estate plan, leaving them and their loved ones unprepared for carrying out final wishes.

A well-crafted estate plan offers peace of mind by preparing for potential incapacity later in life and ensuring that your assets are distributed according to your wishes. It can also help reduce any tax burden on your beneficiaries. Key components to include in an estate plan include a will, healthcare directive, naming beneficiaries, purchasing life insurance and designating a power of attorney.

“It’s understandable that Canadians want to avoid thinking and speaking about death, but having these difficult conversations now and ensuring that a comprehensive plan is in place will make it easier in the future, both for yourself and your loved ones,” said Christine Van Cauwenberghe, Head of Financial Planning at IG Wealth Management.

Understanding an estate plan

Canadians have noted that the main reason why they haven’t prepared an estate plan is because they don’t think they have enough wealth to make having one worthwhile. They’re also unfamiliar with key aspects related to estate planning, with approximately half saying they’re not knowledgeable about the tax considerations associated with passing along an estate, the benefits of having life insurance and the consequences of not having a will or power of attorney.

“It’s concerning that so many Canadians are unfamiliar with key components that make up an estate plan,” said Ms. Van Cauwenberghe. “Take, for instance, the lack of knowledge around taxation. The reality is that passing down assets can often result in a significant tax burden and Canadians should be well-versed on the strategies to help offset these costs.”

Preparing for cognitive decline

An estate plan is also needed in case of cognitive decline. Conditions like Alzheimer’s disease can impact one’s ability to make decisions around their wealth and assets. There can also often be significant costs related to living with cognitive decline.

Just one quarter have planned for any possible expenses related to cognitive decline. In addition, only one-third per cent have made plans for what will happen to their assets and just under 40 per cent have made plans for who will manage their finances.

“Cognitive decline can happen to anyone at any time, so it’s a good idea for Canadians to seek out the assistance of a financial advisor who can help them build a thoughtfully crafted estate plan that takes this into account,” reinforced Ms. Van Cauwenberghe.

Start with a plan

For more on how to build an estate plan that meets your needs, listen to a special edition of IG Wealth Management’s The Living Market podcast hosted by Aurèle Courcelles, Vice-President, Tax & Estate Planning at IG Wealth Management with Dan Britton, Assistant Vice-President, Tax & Estate Planning at IG Wealth Management: The Living Market Podcast | IG Wealth Management