In the wake of research finding that almost half of Canadians do not have a will, Toronto-based Canadian Imperial Bank of Commerce (CIBC) released a reportthat details some of the most common estate planning mistakes.

The CIBC (TSX: CM) report, released Monday, also finds that 46% of those without a will believe they are too young or do not have enough assets to justify having one. Almost one-third of baby boomers and almost 10% of seniors help make up this latter group, even though they are in life stages when people typically have accumulated the most assets and may be nearing the end of their lives.

“It’s surprising how many people don’t have a will or think they don’t need one,” says Jamie Golombek, managing director of tax and estate planning at CIBC, in a statement.

Although many Canadians are unprepared to transfer their wealth, the survey finds that 51% of Canadians expect to leave assets upon their death, with 33% undecided. On average, Canadians expecting to pass on assets plan to leave their heirs nearly $380,000.

CIBC’s report, entitled Your Estate Matters!
 Common Traps and How to Avoid Them, attributes a lack of preparation regarding wealth transfer to lack of knowledge. While some believe that “estate” generally refers to those who leave substantial assets, virtually every adult has an estate on their death, even if they die with no will and few assets.

The report also notes that many Canadians don’t realize that, without a will, their affairs are dealt with by the provincial government. Generally, this means that any assets and liabilities are distributed according to the laws of the province where the person died. These laws may or may not reflect the wishes of the deceased person.

For instance, a surviving spouse may not be entitled to all assets if there is no will. In most provinces, a preferential share of the estate goes to the spouse. The balance is split between the spouse and the children of the deceased.

Another mistake clients need to be aware of is “do-it-yourself” planning for the management and transfer of an estate.

“Many estate planning mistakes are made through inexperience and lack of knowledge,” says Golombek. “Family, succession and income tax laws are very complex and vary from province to province. These laws also change frequently.”

Golombek encourages Canadians to seek professional advice. In addition to smoothing the way for an orderly transfer to heirs, including reducing the costs and delays of administration of the estate, such advice can help avoid the erosion of the estate’s value for the next generation, for instance by including tax advice. The cost of proper advice is often less than the cost of unnecessary taxes and fees that may arise without an estate plan in place, he says.

The online survey was conducted from May 19 to May 20 among 1,504 Canadian adults who are also Angus Reid Forum panelists.