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Life insurance provides a one-time, tax-free death benefit to your beneficiaries in the event you pass away
The proceeds can be used however your beneficiaries need it most
It is possible to apply online for life insurance quickly and easily and without a medical exam
Your choice of term can be customized to your budget, and your coverage needs
Not all life insurance options are available to purchase online
What to consider before getting life insurance online
It can be daunting to think about life insurance (and what happens after you die), but once you understand the purpose, benefits and limitations of buying life insurance online, you can easily find a policy that meets your needs.
Why buy life insurance?
There are many reasons to buy life insurance but perhaps the main one is to provide financial security to those who depend on you after you pass away. Upon your death, your beneficiary, such as your spouse, receives a one-time, non-taxable lump-sum death benefit.
This money can be used however it is most needed, such as:
Covering the cost of funeral or cremation expenses
Paying off the mortgage and/or other household debt
Replacing lost income for childcare expenses or household bills
Funding your child(ren)’s tuition or other education expenses
Creating a tax-free inheritance
Heading
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When is the best time to apply for life insurance?
There is no best time to buy life insurance but typically, if you apply when you are young and healthy, your premiums will likely be lower.
Some people time their purchase of life insurance to coincide with a major life event, such as getting married, buying a house or having a baby. Once you have other people depending on your income, or if you have debt (such as a mortgage) that will remain after your death, then it’s a good idea to apply for life insurance.
You should likely consider purchasing life insurance now if you:
Are expecting a baby or have kids or other dependents
Share financial responsibilities with a spouse or partner
Have debt, such a mortgage, personal loans or a car loan
Do not have enough savings to cover end-of-life expenses, such as your funeral, cremation or burial
Want to leave an inheritance to your family and loved ones
What is the right amount of life insurance coverage?
Life insurance is not one-size-fits all and it’s important to consider both your financial needs (including your total debt) and your budget.
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Financial needs
Debt: How much debt do you have and how long will it take to pay off?
Your current income: How much replacement income do you need to help your spouse or partner with day-to-day expenses?
Your end-of-life expenses: The cost of a funeral, cremation or burial costs can vary significantly, starting at $800 for a simple cremation up to $15,000 (or more) for a burial, according to Canadian Funerals.
Future education expenses: A four-year degree can cost over $100,000, including tuition, living expenses and food.
Inheritance: How much do you want to leave your family as extra, above these basic needs?
You may also have employer-provided life insurance. While this is a great benefit, especially if you don’t have other coverage, it’s important to understand its limitations, namely:
Coverage is usually two to three times your salary, which may not be enough
Your policy is only in effect while you are employed by that company, so if you get laid off or switch jobs, you will lose that coverage
Employer-provided life insurance can provide excellent supplemental coverage, but if you have the budget, purchasing more that is not tied to your employer can add another layer of security for your dependents.
FAQs
Question 1 seshu doing testing on this
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Question 2
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Most Canadians understand that having a will is important — yet many still don’t have one. Fewer than half have a will, and among those without one, a common reason is simply not knowing where to start.
Thinking about what happens after you die isn’t exactly fun dinner table conversation. But putting off a will can leave loved ones in the lurch during an already difficult time. The good news? Writing a will is usually far easier than many people expect.
This guide explains what a will does, who needs a will (spoiler alert: almost everyone!), the main types of wills, how to create one, and what happens if you die without one.
Key takeaways
A will is a legal document that sets out what happens to your assets and dependents after you die.
In Canada, if you die without a will (known as dying intestate), your estate is settled according to provincial or territorial law.
You should consider making a will if you are married or in a common-law relationship, have dependents, own property, investments, or a business, or have a life insurance policy or other assets.
The four most common types of wills in Canada are a simple will, formal will, holographic will, and living will.
Common mistakes in making a will include letting it go out of date, not signing or witnessing the will properly, using vague or confusing language, and forgetting to name an alternate executor and beneficiaries.
What is a will?
A will is a legal document that sets out what happens to your assets and dependents after you die. It gives clear instructions, so your affairs are handled the way you intended.
While every will is different, most typically include:
Your identity and confirmation that the document replaces any previous versions.
The name of an executor — the person responsible for carrying out the instructions and managing the estate.
The names of your beneficiaries — the individuals or organizations who will receive your money, property, or specific gifts.
Instructions for dependents, such as naming a guardian for minor children.
Directions for how assets should be managed and distributed.
Why you need a will
A will answers a few practical questions: who will manage your estate, who should receive your assets, and who should care for any dependents. Regardless of the size of your estate, having a will can help:
Provide clarity for your loved ones. A will spells out who receives what, helping to reduce uncertainty and the likelihood of disagreements.
Keep decisions in your hands. With a will in place, your estate is usually distributed according to your instructions, rather than default provincial or territorial laws.
Protect dependents and loved ones. A will can help support the timely and orderly transfer of assets to a spouse, children, or other loved ones.
Make the process easier to manage. Clear direction can simplify estate administration. Without a will, assets may be tied up until a court appoints an administrator.
If you die without a will (known as dying intestate), your estate is settled according to provincial or territorial law — not your personal wishes. That means the courts decide who inherits what, even if that’s not how you would have divided things. That can lead to delays, court involvement, family conflict, and increased costs to wrap up the estate.
Who needs a will?
When it comes to who needs a will, the short answer is: almost everyone.
While a will isn’t legally required, most adults can benefit from having one, especially if you:
Are in a common-law relationship. A surviving partner does not automatically have the same legal rights as a married spouse.
Have dependents. A will allows you to name a guardian for minor children and provide direction for the care of other dependents.
Own property, investments, or a business.
Have life insurance or other assets that need direction.
Want to leave a charitable or personal legacy.
Types of wills in Canada
There’s no one type of will in Canada. The right type depends on your situation and how complex it is.
One thing to keep in mind: wills follow provincial or territorial rules. Each province has its own requirements for things like signing, witnesses, and in some cases, handwritten wills, so make sure you’re covering all your bases.
Here are four common types of wills in Canada:
Simple will
A simple will (or basic will) is a basic legal document that sets out your final wishes. It typically covers the essentials, such as naming an executor, identifying beneficiaries, and if applicable, setting out guardianship for minor children or pets.
For many Canadians, a simple will can often be enough. If your situation is more complex, you may want to explore other options.
“Simple” refers to your situation, not the legal format of the will. In practice, most simple wills are still attested (confirmed to be genuine) and are properly signed and witnessed.
Formal will
A formal (or attested) will refers to how a will is legally completed — not what’s in it. It’s any written will, usually typed, that’s signed by the person making it in the presence of two witnesses, who also sign the document.
In most cases, the witnesses also complete a sworn statement (called an affidavit) confirming they saw the will being signed and had no reason to believe the person making it lacked the capacity to provide legal instructions.
While a lawyer is not required, many people choose to have a will prepared with legal assistance when their circumstances are more complex or when added certainty is important.
Holographic will
Despite the sci-fi name, this type of will has nothing to do with 3D images or Star Trek reruns. A holographic will is an entirely handwritten document, with no typed or printed text allowed, that’s signed and dated by the person making it. Witnesses are generally not required.
However, the trade-off with a holographic will is more room for mistakes or misunderstandings that can lead to problems or challenges from beneficiaries later. Courts may also require proof during probate that the handwriting matches that of the testator (the person writing the will).
Holographic wills may not be legally valid in every province and territory, so it’s important to check the rules depending on where you live. Because of these risks, holographic wills are generally better suited to limited or urgent situations, rather than long-term planning.
Living will
A living will is a legal document that sets out your wishes for medical treatment if you’re still alive but unable to speak for yourself due to illness, injury, or old age. It can guide medical decisions, including what types of treatment you would be willing to receive, and at what point you would want interventions to be limited or stopped if recovery is unlikely.
What are the legal requirements of a valid will?
While rules on what constitutes a legally valid will vary by province or territory, a will is generally considered valid in Canada if it:
Is in writing (with the exception of British Columbia)
Is made by someone of legal age and of sound mind
Is signed by the person making the will
Is properly witnessed, unless an exception applies (such as a holographic will).
There are also rules about who can act as a witness and extra technical details can apply depending on the type of will and where it’s made. Because of that, it’s important that your will follows the rules where you live.
How to write your will: A step-by-step guide
If making a will feels like a lot, you’re not alone. Writing a will is usually easier if you break it down into a few manageable steps.
Step 1: Take stock of what you own — and owe
Start by listing what makes up your estate. Think about property, vehicles, bank and investment accounts, insurance, pensions, personal belongings, and digital assets (like online accounts, loyalty programs, etc.)
Outstanding debts, such as mortgages, credit cards, and loans, are typically settled as part of estate administration, so it helps to be aware of them too.
Step 2: Choose your beneficiaries
Beneficiaries can include individuals, charities, or organizations. It’s up to you! Some people also name alternate beneficiaries in case their first choice can’t inherit, or a trustee if the beneficiary is a child not of the age of majority.
You’ll also name someone to carry out your wishes and manage your estate after death. This role is often called an executor, though the title varies by province.
The executor can be a family member, trusted friend, or professional. What matters most is that the person is willing and able to take on the responsibility.
If you have minor children or other dependents, you can express your wishes around guardianship. Without that guidance, courts may need to step in.
Step 5: Choose an approach
In general, people take one of four options:
Creating an online or DIY will
Some people use online tools or templates to create a DIY will. These options are often used for relatively simple situations and still need to meet provincial or territorial requirements — including proper signing and witnessing — to be legally valid.
Online wills platforms, such as Epilogue, offer a fast and convenient way to create a legal will. Typically, you complete the will online, print it and then have it witnesses according to provincial regulations.
Working with a lawyer
Others choose to work with an estate lawyer, particularly when their circumstances are more complex. Legal professionals can help navigate trickier issues like blended families, business ownership, or assets in multiple jurisdictions, and ensure the will meets local legal requirements.
Hybrid approach
Some people combine the two approaches — drafting a will using an online tool and have a legal professional review it for added reassurance. They may also use a notary who verify your identify, capacity to make a will and ensure your will is legally valid, based on where you live.
Step 6: Finalize your will
A will needs to be properly signed and witnessed to be legally valid. Notarization usually isn’t required, though there are exceptions.
Step 7: Store your will
A will can only serve its purpose if it can be found. Keep it somewhere secure and accessible, whether that’s at home, with a lawyer or notary, a safety deposit box at the bank, or another safe place. And don’t forget to tell your executor where it’s stored!
Step 8: Revisit your will as life changes
Wills aren’t set-and-forget documents. You should review your wills after major events — like moving, a change in family circumstances, or a financial shift — to make sure everything still lines up with your intentions.
Common mistakes to avoid
Even a simple will can run into problems if a few basics are overlooked. Common pitfalls can include:
Letting a will go out of date, especially after major life changes.
Not signing or witnessing the will properly, which can affect whether it’s considered valid.
Using vague or confusing language, such as “divide everything fairly,” without explaining what that means.
Forgetting to name backups, like alternate beneficiaries or an alternate executor.
Take the next step
Writing a will is about the mark you leave behind. It’s how you decide what matters, who matters, and how the things you’ve built and cared about carry forward.
A will puts your intentions into writing — not just about money or property, but about responsibility, fairness, and care. It helps ensure that what you leave reflects your values, and that your story doesn’t end in confusion or conflict.
Whether you choose an online option or work with a professional, taking this step is a way to be deliberate about your legacy and thoughtful about what comes next.
FAQs about making a will
Is a handwritten will legal in Canada?
A handwritten, or holographic, will is generally legal in Canada if it is written entirely by hand and signed by the person making it. However, the rules vary by province and territory, and handwritten wills may not be accepted everywhere.
Are will kits legal in Canada?
Yes, online will kits are generally legally valid, so long as they meet provincial or territorial requirements and are properly signed and witnessed.
Can I write a will without a lawyer?
Yes. A lawyer isn’t required to make a valid will, but it still needs to comply with the estate laws where you live.
How often should I update my will?
Many people review their will after major life changes, or every few years to make sure it still reflects their wishes.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
Getting your driver’s licence is a significant milestone. Whether you’re a young driver or getting your licence later in life, sitting in the driver’s seat can bring a new sense of freedom, responsibility, and independence — along with questions. One of the biggest? Auto insurance.
For new drivers in Canada, understanding how auto insurance works, and how to choose the right coverage, may feel overwhelming at first. While it can seem overwhelming, this guide breaks down car insurance for new drivers in straightforward terms, from coverage options to what affects insurance costs, so you can feel confident every time you get behind the wheel.
Key takeaways
Auto insurance is mandatory in Canada and helps protect you, your vehicle, and everyone else on the road.
While each province and territory set out its own mandatory requirements, auto insurance in Canada typically includes third-party liability (required by law), collision (covers damage from crashes or rollovers), and comprehensive coverage (covers things like theft, vandalism, and weather-related damage), with optional add-ons available for extra protection.
Auto insurance pricing varies and is calculated based on many factors, such as the driver’s personal details, driving experience, the vehicle model, and where you live.
Building driving experience and maintaining a clean driving record could make a difference in insurance premium pricing.
Driving experience and your driving record can make a difference in insurance premium pricing.
There are ways to help manage costs, like accredited driving courses, bundling insurance coverage, and looking for available discounts.
Comparing options and understanding your coverage helps you choose a policy that fits your life as a new driver.
What is car insurance and why is it important?
Car insurance is a type of policy that helps cover the costs if something goes wrong while you’re driving — like an accident, vehicle damage, or theft. In Canada, car insurance is legally required. Driving without it can lead to personal liability due to injury or damages to third party, and/or lawsuits, or consequences, including fines, licence suspension, and having your vehicle impounded.
Depending on your policy, car insurance can help pay for repairs or replacement of your vehicle, along with liability claims if you’re responsible for an accident that causes injury or damage. Without insurance, those costs would come out of pocket — and can add up quickly.
Types of auto insurance coverage
Car insurance isn’t one-size-fits-all. Policies are made up of different types of coverage, each designed to protect you in specific situations. For new drivers, understanding these options can make it easier to compare coverage and know what protection you’re actually paying for.
Third-party liability insurance
Third-party liability insurance (also called liability insurance) helps protect you financially if you injure someone or damage another person’s property or vehicle while driving. It helps cover costs like medical expenses, repair bills, or legal claims made against you after an accident. What it doesn’t do is pay for damage to your vehicle — that’s handled through other types of car insurance.
In Canada, drivers are legally required to carry a minimum amount of third-party liability insurance The exact minimum depends on your province or territory. For example, the required minimum is $200,000 in Ontario and New Brunswick, while the minimum requirement for mandatory auto insurance in Quebec is $50,000 in Civil Liability.
However, most drivers may opt to purchase more than the required minimum coverage to protect themselves in the case of a serious accident. If the cost of an accident is higher than the limit on your policy, you could be liable for paying the difference.
Collision and comprehensive coverage
Collision and comprehensive coverage are types of insurance that help pay for damage to your vehicle. These two are often lumped together, but each one helps protect against different risks.
Collision insurance helps pay for damage to your vehicle caused by a collisionwith anothervehicle or object, or if your vehicle rolls over (also called “upset”). That can include situations like sliding off an icy road and flipping over or hitting a guardrail or pole. If your vehicle is leased or financed, Collision and Comprehensive coverage is often required by the lender or leasing company.
Comprehensive insurance helps cover damage or loss from things other than collision or upset — like most thefts, vandalism, fire, flying debris, a natural disaster, or other unexpected events.
Optional car insurance coverage
Beyond mandatory coverage, you can add optional coverage to your car insurance policy. These are called endorsements, and they’re meant to give you extra protection in certain situations. Here are some common options:
Family Protection endorsement is an optional endorsement that can help if you or eligible family members are injured by a driver who are uninsured, underinsured, or can’t be identified. In those situations, this coverage may allow you to seek compensation through your own policy. Family Protection coverage is not available in every province, but is available in Ontario, Alberta, and Atlantic Canada. Other provinces offer similar coverage through their government insurance.
Waiver of depreciation endorsement. If your vehicle is seriously damaged and considered a total loss, this add-on may prevent depreciation from being applied. Instead of receiving what the car was worth at the time of the claim, the settlement may be based on the original purchase price or replacement value – whichever is less.
Alternate transportation benefits (known as “Loss of Use”). If your car is being repaired after a covered claim, this coverage may help pay for temporary transportation, such as a rental car, so you’re not left scrambling.
Accident Rating Waiver endorsement may help keep your premium from increasing following your first at-fault accident.
Comprehensive emergency roadside and driver assistance program can help with emergency roadside issues, like a flat tire, a dead battery, running out of fuel, or being locked out of your car.
Factors that can affect car insurance premiums for new drivers
When calculating a premium for a new driver, insurers typically look at several factors to estimate risk and set pricing. Some of these factors are about the driver, others may be about the type of vehicle and where you live. That’s why rates can vary from one new driver to the next.
Here are some of the key factors that could influence car insurance premiums:
Personal details and driving experience
When calculating insurance rates for new drivers, insurers may look at a mix of basic details and driving experience. Factors like age and gender can come into play — and this is not based on a single individual. Insurers generally use driving data to estimate risk across group characteristics and set pricing. For example, data shows that younger drivers, particularly teenagers, have more accidents on average than older drivers. That’s why the rates are typically higher for young adults.
New drivers — at any age — usually start with higher premiums simply because there isn’t much of a driving history to go on. Over time, as you build claims-free experience and a clean driving record, that information can carry more weight.
The good news is that no single detail decides your rate. How you actually drive and the record you build over time are an important part of the bigger picture.
Vehicle type
It’s not just about who’s driving — the car itself plays a role in how insurance rates are determined. When you’re getting a quote, insurers look closely at the make, model, year, value, and potential repair costs of the vehicle you’re insuring.
Reliable compact cars, sedans, small SUVs, and minivans with good safety features, low theft risk, and affordable repairs are typically the cheapest to insure. Vehicles with good safety features may help you avoid accidents or reduce the severity of damages, leading to lower claim costs, meaning less risk for insurers.
On the opposite end of the spectrum, you’ll find the most expensive vehicles to insure: high-performance cars, luxury cars, large SUVs, and trucks. However, exceptions exist to every trend. Your vehicle’s size and sticker price doesn’t guarantee a high or low insurance premium.
Driving record
Previous accidents, speeding tickets, driving convictions, driver training experience, licence suspensions and how long you’ve had your licence can affect the price of your premiums. In general, the better your record, the lower your premium. However, there are other factors involved that determine the overall premium. Switching insurers doesn’t change your driving history, so your premiums will still reflect any past convictions or insurance claims.
Location
Where you live can also affect your car insurance premium. Rates are generally higher in urban areas, where traffic volume, accidents, and vehicle theft tend to be more common, and lower in many rural areas where the risks are typically reduced.
How to lower car insurance rates for young drivers
Getting a quote for car insurance for young drivers can be a bit like sticker shock. The upside? As you build a clean driving record, premium may start to come down over time, all other things being equal. In the meantime, there are ways to help manage costs while still keeping the right protection in place.
Choose the right car
Cars with strong safety ratings, less theft risk, and potentially lower repair costs are typically less expensive to insure. On the flipside, high-performance and luxury models typically come with pricier premiums simply because they’re more costly to repair or replace.
Pro tip: Consider getting a quote on different vehicles before you buy a car, as the premium can vary greatly.
Credible sources like the Insurance Bureau of Canada’s How Cars Measure Up and Consumer Reports can be a helpful starting point when comparing safety ratings and reliability.
Take an accredited driving course
Safe driving is a crucial skill – but how do you develop it? Most insurers may offer discounts if a driver completes an accredited driving course. More importantly, these programs focus on building safe, defensive driving skills, like anticipating hazards and maintain safe distances to prevent a head-on collision and navigating icy roads — habits that can stick with a driver for life.
Increase your deductible
Your deductible is the amount you pay out of pocket if you need to make a claim. Choosing a higher deductible may lower your monthly insurance premium, but it also means paying more if an accident happens.
A higher deductible can make sense if you have some savings or an emergency fund to fall back on if you’re involved in an accident. Whereas a lower deductible might be worth paying for if you don’t have enough cash to front costs right away.
Maintain a good driving record
Building a good driving record takes time, but it’s one of the most effective ways to influence insurance costs in the long run. Safe driving habits also help reduce the risk of accidents and injuries — which matters far beyond premiums. A few practical habits can make a real difference and some of the following have legal implications if you don’t obey traffic rules:
Limit distractions. Staying focused on the road is key. Using a phone or other devices while driving can increase the risk of collisions. Data from Transport Canada data shows distracted driving contributes to an estimated 22.5 per cent of fatal collisions and 25.5 per cent of serious injury collisions.
Obey speed limits. Slowing down can reduce the risk and severity of collisions — for each 1.6 km/hour reduction in speed could reduce collisions by 5 per cent, according to the Ottawa Safety Council. Obeying speed limits also helps avoid costly tickets that can impact your driving record.
Avoid impaired or fatigued driving. Driving under the influence of drugs or alcohol, or when overly tired, can increase the risk of a crash. On long journeys, schedule breaks to reduce fatigue and improve concentration. If you’re under the influence of alcohol or drugs, find alternative transport or wait until you’re no longer impaired.
Drive for the road conditions. Snowstorms, traffic, other road users, visibility, and construction zones can affect road safety. Giving yourself extra time and space can help reduce risk, especially in poor conditions.
Bundle insurance policies
In some cases, bundling car insurance with property insurance — like tenant or homeowner insurance — can unlock discounts.
Pay your premium upfront and annually
Some insurers may offer the ability to pay your full annual premium upfront instead of in monthly installments, saving you on an additional installment fee surcharge for monthly payments. It can be a hefty amount to come up with once a year — especially for young drivers — so it may not be realistic for everyone.
How much will new driver insurance cost?
There’s no single price tag for new driver insurance in Canada. Costs can vary depending on things like age, gender, location, and the vehicle model.
The best way to understand what insurance might cost in your situation is to get a personalized quote. This car insurance quote tool can help with an estimate.
How to choose the right car insurance policy for new drivers
Choosing first time car insurance can feel like a lot but breaking it down into a few simple steps can help make the decision clearer and hassle-free.
Assess your needs
Start with how you’ll actually use your car and what fits your budget. Things like your vehicle’s value, how often you drive, commute distance, and comfort level with risk can all help shape the amount of coverage you choose for your own policy.
Compare quotes
Insurance rates and coverage options can vary widely. Compare quotes and see how different policies stack up for your situation.
Pro tip: Insurance advisors need to ask you many questions to prepare an accurate quote. Take a few minutes to jot down key dates in your driving history. When did you get your license? How long have you owned your car? Do you have a copy of completing a driver’s ed course? Have you ever had an accident or driving conviction?
Understand the policy terms and conditions
Before choosing a policy, take some time to look beyond the price and review the details. Understand key terms like:
Your premium – what you pay
Deductible – what you pay out of pocket if you make a claim
Coverage limits – the maximum amount your insurance will pay for a covered loss
Exclusions – situations or damages that aren’t covered
Taking a few minutes to read the fine print can ensure your insurance works the way it’s intended.
Look for discounts for new drivers
Keep an eye out for discounts for new drivers, including
Graduated licensing discounts
EV/hybrid vehicle discounts
Theft Recover Device discounts
Driver education graduate discounts
Bundled policy discounts
Alumni association discounts
Workplace and union-based discounts
Also consider enrolling in a telematics program, such as Aviva Journey. These programs track your driving habits to provide personalized discounts. Many companies provide a discount when you first sign up.
There’s also one discount that drivers, new and experienced, often overlook: Snow tires! Using snow tires in winter may result in a discount on your insurance premiums.
Get expert advice
Unsure about what coverage makes sense for your situation? Speaking with a licensed insurance advisor can help. They can walk you through options, answer questions, and help find a policy that fits your needs as a new driver.
Hit the road with confidence
They say you never forget your first car and getting your driver’s license opens up a whole new level of flexibility — spontaneous plans, fewer rideshares, fun road trips, and everyday convenience. But driving also means new responsibilities, including making sure you have the right car insurance in place. When you understand your coverage and choose a policy that fits your life, you’re setting yourself up to drive with confidence — not crossed fingers.
Do the prep, get covered, and then enjoy the ride. That’s when driving really starts to feel like freedom.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
Enjoying a hot chocolate and ice skating are classic winter activities for Canadians. These activities also signal that tax season is approaching. Getting a head start on preparing your taxes ensures that you can maximize claiming tax deductions and credits, enjoy a smoother tax filing experience, and reduce last-minute stress.
Begin by saving the date in your calendar. For the 2025 tax year, the deadline to submit your personal tax return to the Canada Revenue Agency (CRA) are April 30, 2026. If you’re self-employed, you have until June 15, 2026 to file your tax return.
This guide will show how you can prepare for the tax season to help maximize your tax refund or reduce the amount you owe. To give you a head start, we’ve compiled the top 10 tax deductions and the 10 most popular tax credits that caregivers, business owners, students, and homeowners may claim. We’ll explain what they are, who’s eligible, and the amount you could expect to receive in 2026.
How to prepare for tax season
Giving yourself ample time to organize your taxes will help avoid errors and ensure a seamless experience. You can file your taxes yourself or have a tax expert assist you, especially if your situation is more complex.
Start early
As the saying goes, “the early bird gets the worm.” Getting a head start on your taxes allows you to organize your financial records and find any missing information that you may need. Some people prefer a physical folder with printed documents, while others opt for a digital record. The earlier you file your tax return, the sooner you should receive a tax refund – if you’re expecting one. Plus, it reduces the stress that often comes with last-minute filing.
Gather necessary documents
Before you fill out your tax return, you’ll need to collect the supporting documents. These probably include income statements and registered contribution slips. As an example, you may have a T4 slip for employee earnings and a T5 slip for investment income from a Tax-Free Savings Account (TFSA).
You may also have business receipts, medical expenses, childcare costs, or donation receipts that you’d like to deduct from your income. Although you don’t necessarily need to submit every receipt along with your tax return, you’ll want to keep them on file in case the CRA asks to view them. Best practices: CRA recommends keeping supporting records and documents for a period of six years.
Understand tax deadlines
Knowing when to file your taxes can help you plan and complete your tasks on time. Here are the key filing deadlines for the 2025 tax year:
Personal tax return: April 30, 2026.
Business tax return: June 15, 2026.
Paying your taxes: April 30, 2026.
Being mindful of these key dates can help ensure you don’t miss the deadlines and avoid paying interest and penalties for filing late.
Top 10 tax deductions for Canadians in 2025
A tax deduction helps reduce your taxable income, which in turn, can lower the amount of tax you owe, depending on your tax bracket. Generally, these deductions relate to childcare costs, employment expenses, or registered investment contributions.
The following are 10 of the most common tax deductions you may be eligible for when filing your 2025 tax return.
1. Childcare expenses
Parents and caregivers may claim childcare expenses when they pay someone to care for their child so they can work, attend school, or conduct research for a grant. In Canada, eligible childcare expenses include daycare, nursery schools, babysitters, nannies, day camps, and boarding schools. If you live with your partner or spouse, usually the person with the lower income makes the child care claim on their tax return.
2. Registered Retirement Savings Plan (RRSP) deduction
If you’ve earned income in 2025, you may allocate a portion of your money to your Registered Retirement Savings Plan (RRSP). You can contribute up to 18 per cent of your income, with a cap of $32,490 for 2025. One benefit of contributing to your RRSP is that it lowers your taxable income.
Remember, the last day to make a contribution towards your RRSP for the 2025 tax year is March 2, 2026 – so there may still be time to reduce your taxable income.
One way to help reach your retirement goals and reduce taxes is through, a Guaranteed Investment Funds (GIF). These segregated funds that can be held within an RRSP, alongside traditional funds, and are designed to preserve your wealth by offering a maturity guarantee and a death benefit.
3. First Home Savings Account (FHSA)
Countless Canadians aspire to have the keys to their dream home someday. To help make this a reality, the federal government designed the First Home Savings Account (FHSA), so potential homeowners can save towards their future home.
To qualify, you need be a first-time homebuyer and can contribute up to $8,000 per year, with a lifetime contribution limit of $40,000. The bonus? These contributions are deductible from your income tax.
4. Medical expenses
Taking care of your health is a top priority for many Canadians. Whether it’s a visit to the dentist, prescription medication, or therapy, these expenses may be claimed on the tax return. You can claim these medical expenses for yourself, your spouse or common-law partner, children under 18, and dependents.
You can only claim the amount that you paid out of pocket and haven’t been reimbursed through group benefits. The amount you can claim is based on 3 per cent of your net income.
Typically, if you have a spouse or common-law partner, it may be ideal for the person who has the lower income to claim the medical expenses. Be sure to keep your receipts and supporting documents to claim accurate medical expenses.
5. Small business expenses
Running your own business typically requires various upfront and ongoing costs to make a profit. Entrepreneurs and small business owners may be eligible to deduct their work-related expenses.
The most common types of business expenses to claim include rent, utilities, marketing and advertising costs, meals and entertainment, office supplies, banking fees, mobile phone plan, internet, fuel and vehicle expenses, travel, employee wages and salaries. The best practice is to keep your business receipts organized so that you can make accurate claims.
If you’re an employee who was required to pay for expenses in order to do your job, you may be able to claim them on your taxes. It’s important to note that Canadians can only claim out-of-pocket expenses that your employer didn’t reimburse you for. Typical employee expenses include motor vehicle expenses, advertising fees, paying for parking, hotels, or food and entertainment expenses while travelling for work, or home internet fees if you work from home.
Be sure to ask your employer to complete the Form T2200, Declaration of Conditions of Employment. You’ll also need to fill out the Form T777, Statement of Employment Expenses.
7. Carrying charges and interest expenses
Investors who pay interest to borrow money to earn investment income, such as dividends, can deduct interest expense on their tax return. Alternatively, if you pay fees to have your unregistered investments managed or to receive investment advice, you could claim these carrying charges.
Another situation where you can claim an expense is when you paid an accountant to help file your tax return for income from a property or business. However, you cannot claim brokerage fees or commissions to trade securities.
8. Moving expenses
If you’ve relocated for work purposes as an employee, self-employed individual or for full-time studies at a post-secondary institution within Canada, you may be eligible to claim your moving expenses. Your new home must be at least 40 kilometres closer to your new work location or school.
Related costs that you may claim include transportation, storage, temporary lodging, lease cancellation fees, buying and selling your home, or maintaining your home while vacant (up to $5,000). Be sure to fill out the Form T1-M, Moving Expenses Deduction, to claim these amounts.
9. Union or professional dues
If you pay annual dues for a trade union or professional association membership, you may claim these expenses on your tax return in Canada. Annual membership dues must be related to regular operating costs. You can retrieve the amount from your T4 slip or your receipts. Also, if you paid GST/HST on your dues, you may be eligible for a rebate.
10. Student loan interest
After you graduate, it’s not uncommon to still be paying off student loans with once you begin working. The interest that you pay on your student loans can be used as a tax deduction. Although the federal government permanently eliminated student loan interest as of April 1, 2023, each province has its own rules regarding student loan interest.
You can claim interest paid in 2025 and any of the preceding five years if you haven’t claimed them already on your tax return. Claiming this tax deduction can help alleviate the financial burden of paying down your student debt.
Top 10 tax credits for Canadians in 2025
One way to optimize your taxes is by utilizing the tax credits available to you. There are two types of tax credits: refundable and non-refundable. Refundable tax credits help to reduce your tax bill and give you a refund (if the CRA owes you money). However, non-refundable tax credits reduce the amount of income tax you pay, but don’t result in any refunds to you.
Here are the standard tax credits that you should know about and may be eligible for when filing your 2025 taxes.
1. Canada Child Benefit (CCB)
Families raising children under 18 may qualify to receive the Canada Child Benefit (CCB), which is a tax-free monthly payment. The amount you receive is contingent on your household income, marital status, and the number of children you’re caring for.
For instance, a family with a household income below $37,487 could be eligible to receive a CCB benefit up to $666.41 per month for a child under the age of 6 or $562.33 per month for a child between the ages of 6 and 17. Benefit payments are calculated in July from the previous tax year. Therefore, payments from July 2026 to June 2027 will be based on the 2025 tax year.
2. Canada Caregiver Credit (CCC)
Taking care of a spouse, common-law partner, or a dependent who has a physical or mental impairment may qualify you to claim the Canada Caregiver Credit (CCC). The non-refundable tax credit is designed to support caregivers who need to provide basic necessities for their dependents. On your tax return, you can claim the following amounts:
Your spouse or common-law partner: $2,616.
A dependent 18 years or older: $2,616 and up to $8,375.
A child under the age of 18: $2,616.
The CRA may request a signed statement from a medical practitioner explaining when the impairment began and how long it may last.
3. Canada Training Credit (CTC)
Canadian residents aged 26 to 65 who paid tuition and fees at an eligible educational institution may qualify to claim the Canada Training Credit (CTC). On your notice of assessment (NOA), you’ll find the Canada Training Credit Limit (CTCL), which is the amount you can claim on your tax return or up to 50 per cent of your tuition and fees, whichever is less.
If you owe less in taxes than the credit amount, you may receive a tax refund for the difference. Every year when you file your tax return, you may qualify for an increase of $250, with a lifetime maximum of $5,000.
4. Child Disability Benefit (CDB)
The Child Disability Benefit (CDB) helps families who take care of a child under 18 who has a physical or mental impairment. To receive the tax-free monthly payment, you must be eligible for the Canada Child Benefit (CCB), and your child must be eligible to receive the Disability Tax Credit (DTC).
The amount you can expect depends on the number of children who qualify and your household income. For payments from July 2025 to June 2026, the amount will be determined based on the 2024 tax return. You could receive up to $284.25 per month ($3,411 per year) for each child. Payments for the 2025 tax year will be adjusted accordingly for the period from July 2026 to June 2027.
5. Disability Tax Credit (DTC)
If you have a disability or you care for a family member who has a severe or prolonged impairment, then you may be eligible to receive the Disability Tax Credit (DTC). This non-refundable tax credit helps to reduce your income tax to alleviate the costs related to the impairment. To qualify, you’ll need a medical practitioner to help complete the form T2201, Disability Tax Credit Certificate, so that you can submit it to the CRA.
For the 2025 tax year, an individual 18 years or older may claim up to $10,138 on their tax return. Children ages 18 and under have an additional $5,914 in tax credits to claim, for a total of $16,052.
6. GST/HST tax credit
The Goods and Services Tax/Harmonized Sales Tax (GST/HST) tax credit helps modest-income individuals and families offset the cost of goods and services tax they pay. You’ll be considered for this tax credit when you file your annual tax return.
Payments are distributed quarterly. The January 2026 and April 2026 payments are based on the 2024 tax return, whereas the July 2026 and October 2026 payments are based on the 2025 tax return. For instance, for January 2026 and April 2026 payments, you could receive up to:
$533 if you’re an individual.
$698 if you’re married or in a common-law relationship.
$184 per child who is under 19.
7. Tuition Tax Credit (TTC)
Investing in your education is an important step to pursue your career goals. Yet, tuition fees at post-secondary schools have been rising steadily in recent years. To provide financial relief, eligible students can apply for the Tuition Tax Credit (TTC). To qualify, individuals must be 16 years or older and have studied at a post-secondary educational institution to learn or improve their skills in an occupation.
Your educational institution will issue you a tax receipt that has the amount of tuition you paid. You can claim tuition fees if you paid $100 or more in 2025. Eligible expenses include admission fees, application fees, examination fees, and membership or seminar fees. However, if your employer reimbursed you or a job training program covered your fees, then you cannot claim the tuition amount on your tax return.
8. Rebate for first-time home buyers
Without a doubt, buying a home is one of the biggest financial purchases for Canadians. Fortunately, first-time home buyers may receive financial support through the First Time Home Buyers’ Tax Credit (HBTC) on your principal residence. This non-refundable tax credit is calculated by multiplying $10,000 by the lowest federal personal income tax rate (14.5% in 2025). That equates to $1,450 in tax relief for qualifying first-time home buyers.
Recently, the 2025 federal budget proposed a First-Time Home Buyers’ (FTHB) GST/HST rebate. This proposed legislation would grant first-time home buyers a rebate of up to $50,000 for a home worth $1 million, while homes priced between $1 million and $1.5 million receive a reduced rebate. If Bill C-4 gets the green light, first-time home buyers would be able to stack both rebates.
Once you become a homeowner, an important consideration is how you’ll protect your property and belongings. Having the proper home insurance coverage will help secure your investment and safeguard your most valuable assets.
9. Charitable donation tax credit
Canadians are known for their generosity by donating to charitable causes. When you donate money to a registered charity, you should receive a donation receipt. You can claim this amount on your tax return to receive a non-refundable tax credit. Here’s how much you can receive in tax credits:
Federal: 15% on the first $200 donation, then 29% for donations of $200 or more.
Provincial: Ranges from 4% to 25% on the first $200 and those above $200.
If you’re looking to leave a legacy by donating money to a noble cause, a life insurance policy may support your final wishes.
10. Home Accessibility Tax Credit (HATC)
Renovating your home to make it more accessible, functional or safer for a senior (65 and older) or an individual who is eligible for the Disability Tax Credit (DTC) may qualify you for the Home Accessibility Tax Credit (HATC). You may expense materials and labour performed by professional contractors, such as an electrician or plumber. However, you cannot claim the labour performed by yourself or a family member, unless they’re registered to collect GST/HST and meet the criteria outlined by the CRA.
The maximum amount you can claim in a given year is $20,000 for the non-refundable tax credit. Be sure to keep a record of your signed contracts, invoices, and receipts.
Optimize your taxes today while protecting your future
Preparing for tax season can go a long way in optimizing your tax return and ensuring you file on time. Now that you understand which tax deductions and tax credits you can take advantage of, it’s essential to maintain accurate records so that you can make the most of your tax return.
Besides tax planning, it’s a good idea to consider how to protect your financial nest egg, grow your investments, and pass on your wealth once you’re gone. Depending on your situation, insurance could support your financial goals, provide tax-efficient strategies, and assist with estate planning.
By taking a broad approach that includes tax strategies, insurance, and financial planning, you’ll be able to safeguard your assets and provide a lasting legacy for those who matter most.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
You’re probably like most people; you want your loved ones to receive their inheritance quickly and with minimal tax implications should you pass away. Problem is, few Canadians are set up to make that happen. In fact, according to a recent survey by RBC Insurance, only 15 per cent of Canadians have a plan for how their assets will be transferred after they’re gone.
It’s understandable; estate planning can feel intimidating. One key element of estate planning is understanding what probate is and how it works. Otherwise, your family could face delays, surprise expenses, and additional stress at an already tough time.
In other words, you might not achieve what matters most – protecting the people you care about. The good news? Probate doesn’t have to be overly complicated. This guide breaks down what probate is, when it’s legally required (Good news: not always), and what you can expect in terms of costs and timelines. Whether you’re ready to begin planning your estate or settling someone else’s, you’ll get the clarity you need to move forward with confidence.
Key takeaways
Probate is a court process that validates a will and authorizes an executor to manage and distribute a deceased person’s estate.
The purpose of probate is to verifies the will, give an executor the legal power to act, ensure debts are paid first, and distribute assets in accordance with the will.
Probate is not always required in Canada. It is typically required for assets solely in the deceased’s name. Jointly owned assets and registered accounts with named beneficiaries usually bypass probate and don’t count toward estate value.
If you die without a will, the courts appoint an administrator and distribute assets according to provincial rules.
Probate can take six weeks to six months for simple wills. Complex estates could extend to 12–18+ months.
Probate fees vary from province to province.
What is probate?
Probate or “probate of will” is a legal court process that officially confirms the validity of a will, and officially appoints an executor (or administrator) to manage a deceased person’s estate. Once probate is granted by a provincial court, an executor can distribute assets as outlined in the will and in accordance with the law.
It’s important to note that probate isn’t always necessary in Canada, and that it’s the responsibility of the executor to determine whether probate is required.
What is the purpose of probate?
The purpose of probate is to protect everyone involved and ensure your wishes are fulfilled after you’ve passed away. Here’s what probate does:
Verifies the will: Probate essentially gives the will a stamp of approval by a court. Probate assures all interested parties that a will is authentic and the final version – not an outdated draft or a forgery.
Gives the executor legal power to act: Probate prevents unauthorized people from accessing assets once a person dies. Without probate, financial institutions and insurance companies typically won’t release funds or transfer assets.
Ensures debts get paid first: Once a person dies, debts like income taxes, credit card bills, outstanding loans, and probate taxes and related costs must be paid using funds from the estate before any inheritances are distributed. This protects not just creditors but also beneficiaries.
Establishes the estate’s value: This is necessary for calculating probate fees and taxes.
Distributes assets to beneficiaries: Probate ensures your assets are transferred to the people you intended them to go to. It also creates a legal paper trail that accounts for every asset and expense, ensuring the executor follows the rules, and nothing is mishandled.
When is probate required in Canada?
Probate is almost always required if someone hasn’t left a will. If a will exists, there isn’t a universal dollar amount that automatically triggers probate in Canada. If you leave a relatively small estate or assets are to be passed on to a surviving spouse, then probate may not be required. However, each province makes its own rules, and financial institutions set their own policies too.
Generally, probate comes down to the type and ownership of assets. If the deceased person held accounts, investments, or property solely in their name, probate is typically required.
Conversely, assets owned jointly with a spouse typically don’t require probate. For example, if you and your spouse own your home as joint tenants with right of survivorship, the property should go directly to your spouse when you pass away.
Similarly, if beneficiaries are named in a life insurance policy, or for registered accounts like a Registered Retirement Savings Plan (RRSP), Registered Retirement Income Funds (RRIFs), or Tax-free Savings Accounts (TFSAs), probate isn’t required. These assets don’t count toward the estate’s total value – which helps lower probate fees.
What happens if someone dies without a will?
When someone in Canada dies without a valid will, it’s called dying “intestate.” This means they’ve left no instructions about who inherits their assets or who manages their estate. In this case, the courts step in.
Without a will, the courts will appoint an estate trustee (also called an administrator). This is usually the closest next-of-kin.
From there, assets get distributed in a strict legal order set by each province or territory. Typically, assets go to a spouse, then children, parents and siblings. Depending on where you live, common-law partners may not inherit anything – as is the case in Ontario and Quebec. Stepchildren also generally have no legal right to inherit. That close friend or charity you cared about? They’ll receive nothing.
The process of dying without a will may spark family conflict over who gets what or who is in charge, creating rifts that could last for years. Bottom line: dying without a legal will may not produce the results you would have wanted.
What steps are involved in the probate process?
The probate process varies from province to province, but it generally follows the same step-by-step process, regardless of where you live in Canada. Here’s what happens after you pass with a valid will:
Prepare court documents and file the will
The executor’s first job is to submit a valid will and proof of death to the court, along with whatever documentation the court requires to prove the will is the most recent Last Will and Testament. The executor must also apply for probate by filling in the appropriate court documents for that province or territory. Once the courts approve the will, the executor has the legal go-ahead to begin dealing with estate.
2. Notify interested parties
The executor is now legally required to inform everyone who has a stake in the estate that probate is underway – beneficiaries, potential heirs, and known creditors. Some provinces, like Nova Scotia even require a public notice to be published in a local newspaper or online to alert creditors who might not be on anyone’s radar.
3. Take inventory of the estate
A detailed inventory of the estate’s assets is required to determine what’s owed in taxes, including probate fees or taxes. That means the executor must track down and value everything the deceased owned – real estate, bank accounts, investments, pensions, vehicles, jewelry, art, collectibles, even valuable household items.
This is often the most time-consuming step – and shouldn’t be rushed. Certain assets may require professional appraisers, such as a cottage or valuable jewellery. While this adds time and expense, it helps avoid fights over whether something was valued fairly.
4. Pay taxes and debts
The executor must first settle what the estate owes using funds from the estate itself, before any beneficiaries receive their inheritances. Debts include mortgages, income tax, and outstanding bills like credit card balances and medical debts. The executor is also responsible for filing a final tax return and pay any taxes owing on the estate itself, including probate fees and taxes and other probate-related costs like legal and accounting fees.
Family members may be surprised at this point – these costs can add up. On the plus side, money received from an inheritance is not considered taxable income by the Canada Revenue Agency (CRA).
5. Resolve disputes (if they arise)
Not every estate goes smoothly, and disputes may occur. A family member could challenge the validity of a will, claiming it was signed under duress, for example. Other times, beneficiaries may disagree over how assets should be divided. In the event of a dispute, mediation will likely be the first step. If that doesn’t work, it could go to the court to decide, a process that stretches probate by months or possibly years.
6. Distribute assets
Once the debts are paid, taxes are settled, and any disputes are resolved, the executor can finally distribute the remaining assets to the beneficiaries according to the will. After all obligations have been met, the executor can now close the estate by submitting a detailed report listing what expenses came in, what went out, and what was distributed to whom. Finally, any necessary documents are filed with the probate court to officially close the estate.
How long does probate take in Canada?
The short answer? It depends. In straightforward cases where the will is relatively simple, probate in Canada can take as little as six weeks to six months. But complex estates with multiple properties, business interests, or foreign assets, it can take much longer – from 12 to 18 months.
Where you live in Canada matters too. Some provincial courts process probate applications faster than others, and backlogs can cause frustrating delays. An executor’s efficiency also plays a role.
When choosing an executor, consider someone who’s organized, can handle tax, legal, and administrative tasks, and has the time to dedicate to the process. The bottom line: probate isn’t a quick process. Executors and beneficiaries should be prepared for probate to take time, patience, and often more paperwork than anyone expects.
What are the costs of probate?
Probate comes with real costs that can quickly add up. It matters since the executor uses funds from the estate – cash or the proceeds from selling assets – to pay expenses before beneficiaries receive anything. So, every dollar spent on probate is a dollar that doesn’t go to your loved ones.
The biggest expense is usually government probate fees or taxes – often called estate administration taxes. Most provinces charge a fee based on the estate’s value, but rates and how they’re calculated vary widely.
In Ontario, for example, you do not pay Estate Administration Tax if the value of the estate is $50,000 or less.
Alberta caps probate fees at $525 for estates valued at $250,000 or more, and no matter how large the estate, while Quebec has no probate fee.
There are also associated expenses your estate will likely incur along the way, like professional fees for lawyer, accountants, and appraisers. You should also consider compensating an executor for their work. While there is no standard amount for how much executors are paid, a guideline is two to five per cent of the estate’s value, while in Quebec executors usually bill an hourly rate. Family members chosen as executors often waive this fee, but it’s a demanding job that should be acknowledged in some way.
How to reduce probate costs
Here’s the thing – not all probate costs are inevitable with proper estate planning. Consider strategies that bypass probate altogether, like naming beneficiaries on registered accounts and life insurance policies, hold property with right of survivorship, or transfer funds into trusts and segregated funds.
Common challenges with probate
Probate is meant to bring order and clarity after a death but, in real life, it can be anything but simple.
Disputes over the will
One of the most common – and painful – challenges arises when beneficiaries or family members challenge the will’s validity. They might claim the deceased was pressured into signing it or didn’t grasp what they were doing. These disputes can escalate, delaying probate and increasing legal costs.
Disputes can often be resolved through mediation led by a neutral third party – a far less expensive and draining option than going to court. The best solution? Make sure your will is properly drafted, witnessed, and up to date. And consider discussing your wishes with family members ahead of time to prevent surprises later.
Delays in the probate process
Probate rarely moves as quickly as anyone hopes, especially if the court has a backlog of probate applications to process. Missing documents is a common reason for delays. When planning your estate, keep all important documents organized in one place and make sure your executor knows where to find them. Uncooperative beneficiaries who won’t sign off on required forms or challenge decisions could also stall the process. Complex assets like foreign property, privately held businesses, or hard-to-value collections may require extra time for appraisals and legal work.
Insufficient funds to cover debt
If an estate owes more than it’s worth, the executor must prioritize which creditors get paid first – and beneficiaries may end up receive nothing. Debts are paid off in order, beginning with the CRA if tax is owed and provincial or territory tax. Then secured debts such as a property are paid off, followed by unsecured debts like credit cards.
If there simply isn’t enough money, some debts go unpaid, although typically in Canada outstanding debts are not passed on to family members. That’s why it’s crucial to have a clear picture of your debts when estate planning and consider life insurance or other tools to ensure your estate can cover what’s owed.
Emotional stress
Grief and money are a tough combination. Even families that get along well could find themselves at odds during the probate process. Old resentments can resurface, and siblings may disagree about what’s fair. Executors often bear the brunt of this tension – dealing with family dynamics and resolving any disputes, all while doing their job.
Tips for navigating probate
You have the power to make the probate process easier, faster, and less stressful for everyone involved. Here are some practical steps:
Plan
A well-drafted, clear and current will is the foundation to navigating probate once you’re gone. Consider talking to a professional who can help structure your assets to minimize probate fees and maximize what goes to your beneficiaries. Review your assets to make sure there’s enough cash or liquid investments to cover debts, taxes, expenses, and even funeral costs. That way, your executor won’t feel forced to quickly sell property, or have beneficiaries pay out-of-pocket.
Stay organized
Create a centralized file to keep important documents, and let your executor (or loved one) know where to find it. Include information on all your assets and debts – your will, property deeds, insurance policies, bank account information, investment statements, debts like credit card bills – as well as passwords and contact numbers.
If you’re the executor, create a detailed inventory of all assets and debts. Keep meticulous records of every transaction and save all receipts. Good record-keeping protects you, speeds up the process, and gives beneficiaries confidence that everything is being handled properly.
Communicate
Consider having conversations with your family about your wishes. It might feel uncomfortable, but it can prevent disputes and hurt feelings down the road when emotions are running high.
For executors, silence could breed suspicion and misunderstandings. Keep beneficiaries in the loop, even when there’s nothing new to report. Let them know what stage you’re at, what’s taking time, and when they can expect updates.
Get professional help
Probate can involve complex legal, tax, and financial matters – and mistakes could be costly. A lawyer who specializes in estates can guide an executor through the court process and help navigate any disputes. An accountant can ensure the estate meets all its obligations to the CRA.
Estate planning and the role of probate
Probate is a necessary part of estate planning that protects your legacy and ensures your assets reach the people you care about. But without proper planning, probate could become costly, time-consuming, and stressful for your loved ones. Educating yourself on estate planning or working with an accredited advisor could help save your family money and months of stress down the road. It’s worth the effort now to give them peace of mind later.
FAQs about probate
Is probate needed if there is a will?
If you die with a will, probate is not always required in Canada. It depends on a variety of factors including the size and type of assets in the estate. If assets, such as real estate, bank accounts, or other investments, are held solely in the deceased’s name then probate is typically required. Assets with named beneficiaries (life insurance plans or RRSPs) or assets held jointly with a spouse can typically bypass probate altogether.
How long does probate take?
The time probate takes varies from province to province. Straightforward and smaller estates can take around six weeks to a few months, but complex estates with multiple properties, businesses and foreign assets can take 12 to 18 months or more, especially if someone is disputing the validity of the will.
What is the cost of probate in Canada?
Probate fees, also called estate administration tax in some provinces, are charged by the government based on the estate’s value. The costs and how they’re calculated vary dramatically by province or territory. Some provinces, such as Ontario, British Columbia and Nova Scotia, (charge a percentage based on the value of the estate. Some provinces charge a flat fee, some have a fee-based system, such as Alberta, while Manitoba and Quebec charge no probate fees at all. In addition to probate fees, there are other estate costs to consider, such legal, accounting, and administrative costs.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
Many Canadians are good at insuring the obvious stuff: their life, their home, their car, maybe even their phone (if it’s fancy enough). But what often gets overlooked is insuring the one thing that pays for all of it — your income. This is where disability insurance comes into the picture.
Here’s an uncomfortable truth: if something serious affected your health, your finances could unravel faster than you might expect. While many people focus on solely protecting themselves with life insurance, the odds tell a different story — you’re far more likely to be sidelined by illness or injury than to die during your working years. In fact, about one in three working-age Canadians will become disabled and unable to work before age 65.
One big reason why many people aren’t prepared? Some Canadians assume their employer’s disability insurance has them covered. But group health plans usually only replace a portion of your income, may cover you for as long as you’d need, and don’t follow you if you leave your job. And the risks are real: nearly 30 per cent of Canadians say their savings would run out within six months after a major health setback, yet only about 10 per cent have disability insurance.
This article breaks down how disability insurance works in Canada, what workplace disability coverage does (and doesn’t) provide, and how to make sure your most valuable asset — your ability to earn a living — is properly protected. Because hoping your benefits are enough isn’t much of a plan.
Key takeaways
One in three Canadians will be unable to work at some point before age 65. Illness or injury is far more likely during working years than death, yet these risks are too often underinsured.
Your ability to earn an income is your biggest financial asset. It pays for everything else, but it’s easy to overlook when thinking about protection with disability insurance.
Disability insurance provide income support if illness or injury prevents you from working.
Workplace disability coverage can often be overestimated. Employer group plans usually replace only part of your income, may be taxable, may not last long enough, and typically end when you change jobs.
Disability coverage is often more affordable than you’d expect. Depending on the type and amount of coverage, disability insurance may cost roughly 1 per cent to 3 per cent of your annual income.
Understanding disability insurance
Disability insurance is a type of insurance product that helps replace a portion of your income if an injury, illness or mental health event stops you from working – regardless of whether the injury or illness occurred in the workplace or elsewhere. In other words, it helps protect your financial security while you focus on getting better.
In general, disability insurance replaces part of your income — not all of it — up to a maximum amount and for a set period of time. How much you receive, when payments begin, and how long benefits last all depend on your policy.
Some Canadians have disability insurance through an employer, as part of their group health benefits. Others choose to buy coverage through a licensed insurance advisor, especially if they’re self-employed or want to top up the coverage they already have.
Types of disability insurance
There are two main types of disability insurance available in Canada:
Short-term disability insurance covers temporary time away from work, like recovering from a hospital stay, with benefits that typically last up to six months while you recover from an illness or injury.
Long-term disability insurance is designed for more serious or long-lasting conditions, such as cancer. Some plans may provide coverage if you can’t return to your job for up to two years. After that, benefits may continue if you’re unable to work in any job.
In other words, these two types of disability insurance are designed for different “what if” scenarios, and they’re not the only types of disability insurance available.
What does a disability insurance policy cover?
At this point, you might be wondering, Okay, but what actually counts as a disability? What qualifies as a disability will largely depends on the policy you choose, and the details in the plan.
Some policies are narrower than others. For example, an accident-only policy covers disabilities caused by injury, but not illness. More comprehensive disability insurance policies can cover both illness and injury, though exclusions and limitations may still apply.
Depending on your coverage, disability insurance may provide income support if:
You’re injured in a car accident and need months of rehabilitation.
You fall while skiing, break an arm, and your job requires full use of both hands.
You experience mental health challenges that make it impossible to work.
The key thing to remember? Disability insurance policies aren’t one-size-fits-all.
What are the benefits of disability insurance?
The benefits of disability insurance go beyond replacing a paycheque. For Canadians and their families, disability insurance can provide financial stability and flexibility during an otherwise stressful time. Here’s what it can help with:
Income replacement
Disability insurance benefits are usually paid directly to you, which means you decide how to use the money — rent, groceries, medical costs, car payments, whatever’s most pressing. With private disability insurance, if you pay your premiums yourself using after-tax income, the benefits you receive are generally tax-free.
Peace of mind
The length someone is unable to work due to disability can last years — on average between 2.1 and 3.2 years. That’s a long time to rely on savings alone. Having income protection from disability insurance can ease financial stress so you can focus on recovery, not constant money worries.
Support while returning to work
Getting back to work after an illness or injury isn’t always a straight line. Some disability insurance policies may include return to work benefits, such as rehabilitation services, retraining, or workplace accommodations, to help make that transition smoother when you’re ready.
A top-up to government benefits
Government programs like Employment Insurance (EI), the Canada Pension Plan (CPP), or Quebec Pension Plan (QPP) can provide support, but eligibility rules are strict and coverage is limited. Private disability insurance can help fill the gap when government benefits don’t go far enough.
Coverage that stays with you
Disability insurance through an employer usually ends when your job does. Whereas private disability insurance isn’t tied to your employer, so it can stay with you if you change jobs, become self-employed, or retire.
More flexibility than workplace coverage
Group insurance plans don’t always go as far as expected. Many replace only about half of your net income, and benefits are often taxable if your employer pays the premiums – leaving you with less money to cover expenses.
On the other hand, individual disability insurance plans usually offer more flexibility, a broader definition of what is included as a disability, and optional features tied to how you actually work. If you pay the premiums yourself, benefits are generally tax-free.
More affordable than expected
With individual disability insurance, you can often adjust coverage to fit your needs and budget. Depending on the type of disability insurance and amount of coverage, it may cost roughly 1 per cent to 3 per cent of your annual income.
How much disability insurance do you need?
The short answer is: it depends. Disability insurance is generally designed to replace between 60 per cent and 85 per cent of your income. Many Canadians rely on workplace group coverage, but employer plans typically replace only part of your income, limit how long you’ll receive disability benefits, or place restrictions on what is covered as a disability. That’s why some people choose to supplement workplace coverage with a private disability insurance plan.
When calculating how much disability insurance you need, it’s more helpful to think about what your income supports — and which expenses are will still need to be covered if your paycheque stopped. A few key considerations include:
Current coverage. Group benefits can help, but many replace only about half of your net income. That may work for a while, but what happens if you need long-term disability coverage?
Your everyday lifestyle. How much does it actually cost to run your life right now? If you had to cut back, what’s realistic? And for how long?
Your fixed expenses and savings. Bills don’t stop because you’re sick or injured, and savings can be wiped out faster than expected.
The people who depend on you. If others depend on your income, going from two paycheques to one (or none!) can be a big adjustment. Add caregiving into the mix, and it can get even harder.
Your work flexibility. If you couldn’t do your current job, could you reasonably pivot? Or does your income hinge on specific skills, physical demands, or credentials?
Your longer-term plans. Time away from work can impact things like retirement, education savings, or buying a home.
Not sure where to start? You can plug your numbers into the disability insurance calculator from RBC Insurance and see how your income, expenses, and existing coverage stack up.
Key factors to consider when applying for disability insurance
Beyond the monthly benefit amount, a few details can make a big difference when applying for disability insurance:
Your existing coverage. Take stock of what policies you already have in place and pinpoint any gaps in coverage.
How is disability defined? This could a big consideration, as definitions vary by insurer. Some policies may focus on whether you can do your job, while others look at whether you can do any job. Also, carefully review the exclusions or limitations, including pre-existing conditions.
The waiting period. This is how long you need to be off work before disability benefits kick in (e.g., 30, 60, 90, or 120 days).
How long do disability benefits last? Some policies pay benefits for a set period, while others continue until a certain age, such as 65. Make sure that timeline aligns with how long you would want support to span.
Cost, taxes, and flexibility. Premiums depend on factors like age, health, occupation, and coverage choices. It’s also worth checking out how benefits are taxed, whether coverage can be increased later, and whether partial work is allowed while receiving benefits.
Support and claims. Ask how disability insurance claims are handled and whether the policy includes additional support, like return to work services.
Cover yourself and your income with disability insurance
The odds of winning the lottery are about one in 14 million, and people still buy tickets. But the chances of becoming disabled and unable to work at some point during your career? Closer to one in three.
Disability insurance can help safeguard the life you’ve built if illness or injury prevents you from working. Group disability coverage through an employer can help protect you, but it may not be enough to sufficiently cover your expenses.
If you’re unsure how much protection you need, RBC Insurance’s disability calculator can help you estimate how your income, expenses, and existing coverage line up. Still have questions? One of our licensed insurance advisors can help you make sense of the options. Because your financial security isn’t something to leave to luck.
*Home and auto insurance products are distributed by RBC Insurance Agency Ltd. and underwritten by Aviva General Insurance Company. In Quebec, RBC Insurance Agency Ltd. Is registered as a damage insurance agency. As a result of government-run auto insurance plans, auto insurance is not available through RBC Insurance in Manitoba, Saskatchewan and British Columbia.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
