Survey shows most want to ease family’s financial burdens, but only few have an estate plan in place
A survey by RBC Insurance reveals that while many Canadians want to protect their families financially, few are actively planning to achieve this goal.
According to the survey, 82 percent of Canadians believe it is important to ensure their family receives money quickly to avoid out-of-pocket expenses for end-of-life costs.
Similarly, 76 percent aim to minimise estate taxes to maximise inheritance, and 70 percent want to pass money to their family.
Despite these intentions, only 15 percent of Canadians have a plan for how their assets will be transferred to loved ones, rising slightly to 24 percent among retirees.
Additionally, less than 38 percent of retirees have life insurance or funds set aside for final expenses. Retirees are also less likely to be informed about insurance products that could help achieve these goals.
Selene Soo, director of Product Management at RBC Insurance, stated, “We often hear people say, ‘I had no idea how hard it would be,’” referring to the process of managing a loved one’s estate. She added, “If I had known, I would have helped to prepare their finances differently.”
The survey underscores the importance of early conversations and professional guidance to alleviate stress and reduce administrative burdens for families.
RBC Insurance recommends several strategies to address these challenges:
- Relieve administrative burden: More than half of Canadians (53 percent) express a desire not to burden their families but often underestimate the effort involved in closing accounts, paying debts, and handling property. Discussing plans in advance can ease these tasks.
- Ensure funds availability: Without proper planning, end-of-life expenses can lead to out-of-pocket costs for families. Products like life insurance and segregated funds bypass probate, ensuring quick access to funds and minimising fees.
- Control inheritance distribution: Naming beneficiaries prevents delays and uncertainty, especially in complex family dynamics or for individuals without a will. Beneficiaries receive funds directly, avoiding the need to settle debts first.
Creating a comprehensive estate plan, regardless of age or wealth, can help achieve legacy goals and simplify the experience for loved ones. RBC Insurance advises Canadians to consult professionals for tailored strategies.
