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Inheritance Law in Ontario: 3 Key Rules to Know When Planning Your Legacy

August 10, 2022
Dive into inheritance law in Ontario so you can build your Will with ease.
Written By Daniel GoldgutAugust 10, 2022

Putting together a Will already seems overwhelming to many of us. But factor in the intricacies of inheritance law in Ontario? Suddenly you’re feeling downright defeated and you haven’t even started.

That’s why we’re here to help. Keep reading to discover the most important rules of inheritance law in Ontario, so you can plan with ease and – more importantly – confidence that your loved ones are taken care of.

But first, let’s clarify a few basic definitions that are key to understanding Ontario’s Inheritance Laws.

Inheritance Law Ontario

Inheritance Law Ontario Key Terms

What is a Will in Ontario?

  • A Will is a legal document that outlines what someone wishes to do with their property and possessions in the event of their passing.
  • A Will typically also includes who will take guardianship of any minor children or pets, and who will manage their estate when they’re gone.

What is Inheritance?

  • Inheritance is what an individual receives from the deceased’s belongings when they pass away. This can be anything from money, to family heirlooms, to a property.

Depending on how complicated the estate being divided up is, receiving an inheritance can often take more than a year.

Is There Inheritance Tax in Canada?

  • There is no inheritance tax or death tax in Canada. If you receive an inheritance, you personally do not pay any tax on the inheritance amount.
  • However, the deceased’s estate does need to pay tax before any inheritance is given out. This tax includes:
    • Income tax for the year up until the deceased’s death
    • Capital gains associated with any capital property (i.e. investments, house, shares of a business)

And now that we’ve covered the basics, we can dive into the top rules you need to follow to plan your legacy with ease.

Inheritance Law Ontario

3 Key Rules to Know When Planning Your Legacy

Rule #1) Actually Create a Will

Seriously. The first rule of planning your legacy is to actually have a Will in place. It’s the number one way to ensure your legacy will be fulfilled the exact way you want it to. You don’t want to assume that your loved ones will just know what to distribute to who — and you don’t want to put that burden on them to figure it out.

If you pass away without a Will in place in Ontario, there are also inheritance laws that take over the distribution. If you pass away without a Will, it is called an “intestacy”. In the case of an intestacy, Ontario’s Succession Law Reform Act outlines how your estate is distributed, rather than it being distributed in a way that aligns with what you would have wanted.

And creating your Will isn’t expensive or time consuming anymore. You can get started with your Will in as little as 20 minutes, and have peace of mind that your wishes for your loved ones will be met based on your choices, not certain inheritance laws in Ontario.

Get Started

Rule #2) Ensure Your Will is Legally Binding

Seems simple, right? But it’s actually extremely important. If your Will isn’t legally binding, it defeats the entire purpose of having one in place.

So, what makes a Will legally binding in Ontario? The Will has to be:

Created by you, the person who the Will is for, while at least 18 years of age and of sound mind.

Signed by you in front of two witnesses

Physically signed by two witnesses

Signed in ink and stored as a physical copy (despite the digital age, Wills stored just digitally are not legally binding)

Rule #3) Appoint an Executor You Trust

An “executor” is somebody you choose to distribute your estate as outlined in your Will (which is now done and legally binding — great job!). This person is typically somebody you trust, like a partner or child, who will ensure your Will is executed how you envision.

An executor has numerous responsibilities, like

  • Arranging the funeral
  • Notifying beneficiaries of their interest in the estate
  • Distributing the assets of the estate

And these are just some! Check out our full checklist here. This is why choosing an executor you trust to handle these tasks is key.

Under inheritance law in Ontario, an executor can seek to be paid for their service. This payment is approved by the court, and varies based on how complex their responsibilities are.

It’s also important that your executor will actually execute their responsibilities. In Ontario, a beneficiary has a legal right to request a new executor if they believe said executor has not followed the terms of the Will. Inability to perform their responsibilities has to be proven beyond a reasonable doubt.

(Important note: This is one of the only rights of a beneficiary. While they can support, they do not have an explicit right to perform the tasks assigned to the executor.)

Inheritance Law Ontario

Final Thoughts on Inheritance Law in Ontario

While there are some inheritance laws in Ontario (like Ontario’s Succession Law Reform Act) that are important to note, it’s no reason to be scared to start the process of creating your Will.

Making a legally-binding Will is simpler than ever. And when you ensure your Will is made with professional support, you can rest easy knowing your wishes can be executed as smoothly as possible.

Let your loved ones focus on missing you, not fishing through inheritance law and documents.

Written By Daniel Goldgut
Daniel Goldgut is the CEO and Co-Founder of Epilogue. In his previous life, he was a tax and estate planning lawyer for high and ultra-high net worth clients. Now, he's on a mission to democratize estate planning for all Canadians.