Estate planning: Report reveals many Canadians are not prepared

Canadians understand how estate planning helps make sure their wishes are clear and carried out properly should they become ill or pass away. Yet many have not prepared key components of their estate plans, such as creating a Will or appointing a power of attorney (POA). Recent research delves into why.

Key research findings

The National Institute on Ageing (NIA), in collaboration with RBC Royal Trust, produced a report providing insights about Canadians’ views on estate planning. The report is based on the results of an Ipsos survey conducted in April 2022. Here are the key findings:

Canadians know estate planning is important

• Ninety-one percent of Canadians think Wills are an important component of an estate plan.
• Eighty-six percent of Canadians think that appointing a POA is an important component of an estate plan.
• When it comes to not having a Will, 59 percent of Canadians believe a consequence is that their wishes will not be known or followed, yet 16 percent believe there are no consequences or are not aware of any.

In Canada, when someone dies without a Will, distinct rules in each province and territory dictate how assets will be distributed, favouring traditional family structures. An estate plan helps ensure that your wishes are followed and your loved ones, no matter their role in your life, are included.

Many have not created a plan

When it comes to estate planning, older Canadians outpace their younger counterparts; however, many Canadians haven’t prepared estate plans or key components of them. Awareness of the consequences of not having a Will has not translated to action, nor has knowing the importance of appointing a POA.

• Less than one-third (30 percent) of Canadians say they have an estate plan.
• Less than half (48 percent) of Canadians have a Will.
  • While 74 percent of Canadians aged 55 years and older say they have a Will, only 34 percent of those aged 35–54 years and 30 percent of those aged 18–34 years have one.
• Overall, 35 percent of Canadians have appointed a POA for themselves.
• While fewer younger Canadians (28 percent of those aged 35–54 years and 21 percent of those aged 18–34) say they have appointed a POA for themselves, the share of Canadians aged 55 years and older who have remains relatively low at 53 percent.

Why aren’t they setting up their estate plans?

Although Canadians recognize that the common elements of an estate plan are important, many still lack an understanding of overall estate planning fundamentals. In addition, many aren’t sure where to start to get their affairs in order or have misconceptions about the estate planning process.

• Twenty-five percent of Canadians who don’t have a Will say it’s because they don’t know where to start.
• Nearly two-thirds of Canadians (65 percent) have not appointed a POA, and 23 percent of them say it is because they don’t know where to start.
• Younger Canadians aged 18–34 years think they need to reach a certain age to set up a Will (43 percent) or appoint a POA (38 percent).
• Many Canadians think they need to own assets of significant value or complexity to have an estate plan, Will or power of attorney.

Canadians can get started with their estate plan by taking stock of their assets and carefully considering their wishes, potential needs, preferences about where they want to live and receive care and the needs of their loved ones.

With these findings in mind, our goal is to help remove any misconceptions and help clients create an estate plan that aligns with their objectives. The best time to get started is now.

Canada’s aging population

By 2031, when the youngest baby boomers will have reached 65 years old and the oldest begin turning 85, at least one in five Canadians (21.3 percent) will be aged 65 years and older.¹ Having an estate plan in place, even at a younger age, often provides individuals and their loved ones with peace of mind.

Watch the video below to understand how you and your family can overcome the barriers we face when planning our estates.

¹Statistics Canada. (2022, August 22). Population Projections for Canada (2021 to 2068), Provinces and Territories (2021 to 2043). Retrieved March 3, 2023, from: https://www150.statcan.gc.ca/n1/pub/91-520-x/91-520-x2022001-eng.htm

About the National Institute on Ageing
The National Institute on Ageing (NIA) is a public policy and research centre based at Toronto Metropolitan University (formerly Ryerson University). The NIA is dedicated to enhancing successful ageing across the life course. It is unique in its mandate to consider ageing issues from a broad range of perspectives, including those of financial, psychological, and social well-being. Learn more at niageing.ca .

About the RBC Royal Trust suvey
These are some of the findings of an Ipsos survey conducted from April 22 to April 25, 2022, on behalf of RBC Royal Trust. For this survey, a sample of 2001 Canadians aged 18+ was surveyed online. Quotas and weighting were employed to ensure that the sample’s composition reflects that of the Canadian population according to census parameters. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ± 2.5 percentage points, 19 times out of 20, of what the results would have been had all Canadian working adults been surveyed.