A will and a trust are the two tools you reach for most often when you plan your estate in Ontario. Both move your money and property to the people you care about. They work in very different ways. A will speaks only after you die. A trust can work while you are alive, after you die, or both. Knowing the difference helps you protect your family, cut delays, and keep more of your estate out of the taxman’s hands.
Your will names the person who settles your affairs, says who gets what, and lets you choose a guardian for young children. A trust hands assets to a trustee who manages them for the people you name, on the terms you set. Many Ontario families use both. A will covers the basics, while a trust handles special situations like a child with a disability, a blended family, or a private business.
This guide explains what each tool does, what makes a will valid in Ontario, how trusts are taxed, and how probate and the Estate Administration Tax affect your plan. You will also see a side by side comparison and answers to the questions clients ask most. For advice on your own situation, speak with a wills and estates lawyer.
What Is Estate Planning in Ontario?
Estate planning is the process of deciding who manages your affairs and who receives your property if you lose capacity or die. In Ontario, a complete plan usually includes a will, one or more powers of attorney, and sometimes a trust. Together these documents let you keep control, support the people who depend on you, and reduce the tax and delay your family faces later.
The need is real. A 2024 Narrative Research survey found that only 43 percent of Canadian adults have a will, which means more than half have no plan in place at all. When you die without a will in Ontario, the government’s rules decide who inherits, and those rules rarely match what you would have chosen.
| “Most people think estate planning is only for the wealthy or the elderly. In practice, the people who need it most are parents of young children and owners of a home or a small business. A short conversation today saves your family months of stress later.” Demet Altunbulakli, Founding Lawyer, Insight Law Professional Corporation |
What Is a Will?
A will, or Last Will and Testament, is a legal document that says how your property is shared after you die. It names an estate trustee, the person Ontario law calls your executor, who collects your assets, pays your debts and taxes, and gives the rest to the people you name. A will is the foundation of almost every estate plan.
A will lets you do four key things. You decide who inherits your home, savings, investments, and personal items. You choose the estate trustee who carries out your wishes. You name a guardian for your minor children. You can set up a trust inside the will for beneficiaries who are young or vulnerable.
A will has three core features in Ontario.
- It is revocable. You can change or cancel it any time while you have capacity.
- It takes effect on death. Until then it controls nothing.
- It usually goes through probate. The court confirms the will and the estate trustee’s authority before banks and the land registry will act.
What Makes a Will Valid in Ontario?
The Succession Law Reform Act sets the rules for a valid will in Ontario. A formal will must meet each of the following requirements.
- You must be at least 18 years old, with narrow exceptions for married people, members of the armed forces on active service, and sailors at sea.
- You must have a sound mind and understand what you own and who you are providing for.
- The will must be in writing and signed at its end by you.
- Two witnesses must watch you sign at the same time, and then sign the will themselves.
- Your witnesses should not be beneficiaries or the spouse of a beneficiary, because a gift to a witness can be void.
Ontario now allows virtual witnessing over video, but at least one witness must be a licensed lawyer or paralegal, and everyone still signs in wet ink on paper. The province does not recognize a fully electronic or video will. Two recent changes matter for many families. Since January 1, 2022, getting married no longer cancels your existing will. From the same date, an Ontario court can validate a will that misses a formal step if the judge is satisfied the document sets out your true intentions.
What Types of Wills Does Ontario Recognize?
Ontario recognizes two main kinds of wills, plus a planning tool that uses more than one will at once.
- Formal will. A typed will signed in front of two witnesses. This is the standard, and it is the most reliable way to make sure your wishes hold up.
- Holograph will. A will written entirely in your own handwriting and signed by you, with no witnesses needed. It is valid, but handwritten wills cause far more disputes, so treat them as a last resort.
- Multiple wills. Owners of a private corporation often sign a primary will for assets that need probate and a secondary will for private company shares that do not. Done correctly, this keeps the value of the shares out of the probate calculation.
What Is a Trust?
A trust is a legal arrangement with three roles. The settlor creates the trust and puts assets into it. The trustee holds and manages those assets. The beneficiaries receive the benefit on the terms the settlor set. Once you transfer property into a trust, the trust owns it, and the trustee must follow the trust document and act in the beneficiaries’ best interest.
Families use trusts to manage money for someone who cannot manage it themselves, to protect assets, to keep matters private, and to control the timing of gifts. A trust can hold a child’s inheritance until a chosen age, support a relative with a disability without risking their benefits, or pass a business to the next generation in stages.
Trusts split into two broad groups based on when they start.
- Inter vivos trust. Created while you are alive. It can operate for years and can hold assets outside your estate.
- Testamentary trust. Created by your will and funded only after you die.
What Types of Trusts Do Ontario Families Use?
Several trust types come up again and again in Ontario estate plans. The right one depends on your family and your goals.
- Testamentary trust. Set up in your will to hold a gift for a young child or another beneficiary until they are ready to receive it outright.
- Henson trust. A discretionary trust for a beneficiary who relies on the Ontario Disability Support Program. Because the trustee controls payments, the funds usually do not count against the beneficiary’s benefits.
- Alter ego trust. Available if you are 65 or older. You move assets in during your lifetime and remain the only beneficiary while you live. It can pass assets on death without probate, and the transfer in defers tax.
- Joint partner trust. Similar to an alter ego trust, but built for a couple where at least one partner is 65 or older.
- Family trust. Often used by business owners to share future growth with family members and support tax planning while the original owner keeps control.
What Are the Key Differences Between a Will and a Trust?
A will and a trust differ on probate, timing, privacy, control, and cost. Understanding each difference helps you choose the right mix.
Probate and Estate Administration Tax
This is the biggest practical difference. Assets that pass under your will usually need probate, the court process that confirms your will and your estate trustee’s authority. Ontario charges Estate Administration Tax on the value of those assets. Property held in a properly funded inter vivos trust is already owned by the trust, so it generally bypasses probate and that tax.
Timing of Distribution
A will distributes assets only after death, and often only after probate, which can take months. A trust can release funds during your lifetime, on death, or in stages, exactly as you direct.
Privacy
Once a will is probated, it becomes part of the court record, and interested parties can see it. A trust is a private document. You do not file it with the court, so its terms stay confidential.
Control and Ongoing Management
A will gives a one time set of instructions that the estate trustee carries out and then closes the estate. A trust can run for many years, letting the trustee manage and protect assets long after you are gone. That is valuable when a beneficiary is young, vulnerable, or not ready to handle a large sum.
Cost
A will costs less to prepare. A trust costs more to set up and maintain, because the trustee must manage the assets and file separate tax returns. The savings on probate and the control you gain can be worth that cost for larger or more complex estates.
| Feature | Will | Trust |
| What it is | A legal document that says how your estate is shared after you die and who carries out your wishes. | A legal arrangement where a trustee holds and manages assets for the people you choose. |
| When it takes effect | Only when you die. | An inter vivos trust works during your life. A testamentary trust starts when you die. |
| Probate and Estate Administration Tax | Assets that pass under the will usually go through probate and may attract Estate Administration Tax. | Assets in a properly funded inter vivos trust generally pass outside probate, so they avoid that tax. |
| Privacy | Becomes part of the court record once the estate is probated. | Stays private. You do not file it with the court. |
| Control after death | The estate trustee distributes everything, usually fairly soon after the estate is settled. | The trustee can manage and release assets over many years on the terms you set. |
| Cost | Lower to prepare. | Higher to set up and maintain, with ongoing trustee and tax filing duties. |
| Tax at death | Capital property is deemed sold at death. A rollover can defer tax to a spouse. | Funding most trusts triggers a deemed sale. Alter ego and joint partner trusts allow a deferral. |
| Best suited for | Most people, naming a guardian for minor children, and clear gifts. | Minor or disabled beneficiaries, blended families, privacy, and staged payouts. |
How Are Wills and Trusts Taxed in Ontario?
Canada has no estate tax or inheritance tax. Your beneficiaries do not pay tax simply for receiving a gift. Instead, two things drive the tax bill, and you should plan for both.
- Deemed disposition. Under the federal Income Tax Act, you are treated as if you sold your capital property at fair market value right before death. Any gain is taxed on your final return. A rollover can defer that tax when assets pass to a spouse or a qualifying spousal trust.
- Estate Administration Tax. Ontario charges this provincial tax, often called probate tax, on the value of the assets the estate trustee administers under the will.
The Estate Administration Tax is straightforward. The first $50,000 of an estate is free. Above that, the rate is $15 for every $1,000 of value, which works out to 1.5 percent. The estate also files an Estate Information Return with the Ministry of Finance within 180 days of probate. The table below shows how the tax scales.
| Estate value | How the tax works | Approximate tax |
| $50,000 or less | Fully exempt. No tax, but an Estate Information Return is still due. | $0 |
| $250,000 | First $50,000 is free. The next $200,000 is taxed at $15 per $1,000. | $3,000 |
| $500,000 | First $50,000 is free. The next $450,000 is taxed at $15 per $1,000. | $6,750 |
| $1,000,000 | First $50,000 is free. The next $950,000 is taxed at $15 per $1,000. | $14,250 |
Trusts have their own tax rules. Moving assets into most inter vivos trusts is itself a deemed sale that can trigger a capital gain, although alter ego and joint partner trusts let you defer that tax. Most ongoing trusts pay income tax at the top personal rate, and a trust is treated as selling its assets every 21 years. A testamentary trust created by your will can claim graduated rates as a Graduated Rate Estate for up to 36 months, and a trust for a disabled beneficiary may qualify for similar treatment. These rules are technical, so review them with a lawyer before you set up a trust.
How Can You Reduce Probate Tax in Ontario?
You can lower the Estate Administration Tax by keeping assets out of the estate that the court administers. Several legal strategies do this, and each has trade offs you should weigh with a lawyer.
- Name beneficiaries directly. Registered accounts like RRSPs, RRIFs, and TFSAs, plus life insurance, can name a beneficiary and pay out without probate.
- Own property jointly with right of survivorship. The asset passes to the surviving owner outside the estate. Be careful with adult children, because a joint account can create disputes and unintended results.
- Use multiple wills. A secondary will for private company shares keeps their value out of the probate calculation.
- Consider an inter vivos trust. Assets the trust owns are not part of your estate. Alter ego and joint partner trusts suit owners who are 65 or older.
- Make gifts during your lifetime. Property you no longer own is not in your estate, though a gift can trigger capital gains tax now.
Each move can save tax, but each also changes who controls the asset and when. Push too hard to avoid probate and you can create family conflict or a bigger income tax bill. Balance is the goal.
What Happens If You Die Without a Will in Ontario?
If you die without a valid will, you die intestate, and the Succession Law Reform Act decides who inherits. The court appoints an administrator, and the rules follow a fixed family order rather than your wishes.
A married spouse receives a preferential share set by regulation, which is the first $350,000 for deaths on or after March 1, 2021. Anything beyond that is split between the spouse and the children under a set formula. A common law partner does not automatically inherit on an intestacy, no matter how long you lived together, which surprises many couples. If you have no spouse and no children, your estate passes to parents, then siblings, then more distant relatives.
Dying intestate also means you cannot name a guardian for your children or an estate trustee you trust, and the process is usually slower and more expensive. A simple will avoids all of this.
Do You Need a Will, a Trust, or Both?
Almost everyone needs a will. Many people also benefit from a trust. The right choice depends on your family, your assets, and your goals. Consider these factors.
- Size and complexity. A modest estate is well served by a clear will. A larger estate, a private business, or property in more than one province may call for trust planning.
- Young or vulnerable beneficiaries. A trust protects an inheritance for a minor child or a relative with a disability and controls how and when they receive it.
- Privacy. If you want your affairs kept out of the public record, a trust keeps the details confidential.
- Blended families. A trust can provide for a current spouse during their life and then pass the remainder to children from an earlier relationship.
- Cost and effort. A will is simpler and cheaper. A trust adds setup and yearly administration that you should be ready to manage.
A will and a trust are not rivals. The strongest plans pair a will with the right trust and a power of attorney for property and personal care. If your estate includes a company, coordinate your plan with your business succession planning so ownership passes the way you intend.
Which Laws Govern Wills and Trusts in Ontario?
A few core laws shape how wills and trusts work in Ontario. You do not need to master them, but it helps to know the role each one plays.
- Succession Law Reform Act. Sets the rules for a valid will, the rights of family members, and what happens when someone dies without a will. See the Succession Law Reform Act on Ontario.ca.
- Estate Administration Tax Act, 1998. Sets the probate tax on estates. The government explains the rates on its Estate Administration Tax page.
- Trustee Act. Governs the duties and powers of trustees and estate trustees.
- Income Tax Act (Canada). Controls the deemed disposition at death and how trusts are taxed.
Frequently Asked Questions
Is a will or a trust better in Ontario?
Neither is better on its own, because they do different jobs. A will is the foundation that names your estate trustee, your beneficiaries, and a guardian for your children. A trust is an add on that protects assets, keeps matters private, and controls the timing of gifts. Most people start with a will and add a trust only when their family or their assets call for it.
Does a trust avoid probate in Ontario?
A properly funded inter vivos trust can avoid probate, because the trust already owns the assets, so they are not part of your estate. A testamentary trust does not avoid probate, since your will creates it and the will is probated first. Remember that funding most trusts can trigger capital gains tax now, so weigh the probate savings against the immediate tax cost.
How much does probate cost in Ontario?
Ontario charges the Estate Administration Tax. The first $50,000 of the estate is free, and the rest is taxed at $15 for every $1,000, which is 1.5 percent. A $500,000 estate pays about $6,750, and a $1,000,000 estate pays about $14,250. The estate also files an Estate Information Return within 180 days of receiving the certificate.
Can I write my own will in Ontario?
Yes. A will written entirely in your own handwriting and signed by you, called a holograph will, is valid without witnesses. The risk is high, because handwritten and home made wills often miss details, create confusion, and lead to court fights. A lawyer drafted will costs little compared with the disputes a flawed will can cause.
Does getting married cancel my will in Ontario?
No. For marriages on or after January 1, 2022, marriage no longer revokes your existing will. Divorce or separation is treated differently, since gifts to a former spouse and their appointment as estate trustee are usually cancelled. It is still wise to review your will after any major life change.
What is a Henson trust?
A Henson trust is a discretionary trust for a beneficiary who receives Ontario Disability Support Program benefits. The trustee decides if and when to make payments, so the trust assets usually do not count against the beneficiary’s benefits. It is a key tool for parents who want to provide for a child with a disability without putting that support at risk.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
