The bleak outlook for an inter-generational windfall makes financial planning even more important
Canadian parents may be willing to provide financial assistance to their children, even when they’ve grown up. But when it comes to receiving a life-changing inheritance, many Canadians aren’t holding their breath.
In a study of over 1,500 Canadian adults aged over 18, investment firm Edward Jones found that 49% of Canadians are not envisioning an inheritance as part of their long-term financial future.
The firm found that Canadians between 18 and 54 years old are the most optimistic about receiving a financial windfall. Broken down by income, 50% of those earning less than $40,000 said they expect an inheritance, while 39% of those with salaries above $100,000 said the same.
There are still expectations of an inheritance among a minority of older Canadians: that’s 36% of those aged 55 to 64 years old, and one third of those over 65.
“Planning ahead so that you can have an appropriate strategy in place is crucial, whether or not you are not expecting an inheritance from your loved ones,” said Patrick French, principal of solutions tools and consulting with Edward Jones.
Canadians who do not expect an inheritance will have to figure out how to build their own nest egg through proper investment planning, tax optimization, and other wealth-building strategies. Those who do expect an inter-generational wealth transfer face different challenges, which includes dealing with tax implications, determining how the estate should be divided, and ensuring that the beneficiaries can manage the assets responsibly.
“It's not always easy to talk about, but we encourage Canadians to start the conversation about inheritance early so that they can plan accordingly,” said French.
Based on the survey, the majority of Canadians about to retire appear confident that they can bequeath a financial gift. Sixty-one per cent of those between 55 and 64, and 57% of those over 65, said they plan to leave a “significant contribution” to a loved one.
Among those planning to leave behind an inheritance, 60% said it “will provide a significant contribution to their loved one's long-term financial future.”
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In a study of over 1,500 Canadian adults aged over 18, investment firm Edward Jones found that 49% of Canadians are not envisioning an inheritance as part of their long-term financial future.
The firm found that Canadians between 18 and 54 years old are the most optimistic about receiving a financial windfall. Broken down by income, 50% of those earning less than $40,000 said they expect an inheritance, while 39% of those with salaries above $100,000 said the same.
There are still expectations of an inheritance among a minority of older Canadians: that’s 36% of those aged 55 to 64 years old, and one third of those over 65.
“Planning ahead so that you can have an appropriate strategy in place is crucial, whether or not you are not expecting an inheritance from your loved ones,” said Patrick French, principal of solutions tools and consulting with Edward Jones.
Canadians who do not expect an inheritance will have to figure out how to build their own nest egg through proper investment planning, tax optimization, and other wealth-building strategies. Those who do expect an inter-generational wealth transfer face different challenges, which includes dealing with tax implications, determining how the estate should be divided, and ensuring that the beneficiaries can manage the assets responsibly.
“It's not always easy to talk about, but we encourage Canadians to start the conversation about inheritance early so that they can plan accordingly,” said French.
Based on the survey, the majority of Canadians about to retire appear confident that they can bequeath a financial gift. Sixty-one per cent of those between 55 and 64, and 57% of those over 65, said they plan to leave a “significant contribution” to a loved one.
Among those planning to leave behind an inheritance, 60% said it “will provide a significant contribution to their loved one's long-term financial future.”
Related stories:
What happens to cryptocurrency when you die?
Most high-net-worth Canadians unprepared to transfer inheritance
