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Posthaste: Betting on an inheritance? Your chances of getting one are higher in this province

Veuillez noter que cet article se trouve sur une plateforme tierce et qu'il n'est disponible qu'en anglais.

This article, written by Victoria Wells, was originally published on The Financial Post on September 20, 2023.

Canadians are expected to pass on as much as $1 trillion in inheritances over the next decade, though you may have a better chance of being on the receiving end depending on which province you live in, new research suggests.

Just a little more than half of people across Canada say they have the financial means to leave an inheritance to family or friends, according to a recent survey from Canadian Western Bank and conducted by Angus Reid. But for residents of Quebec, that number rises to 60 per cent. In Ontario, 52 per cent of people say an inheritance is in the cards for their loved ones.

People in the Atlantic provinces are least likely to leave an inheritance, with only 42 per cent saying they’re planning to pass money or assets on, Canadian Western Bank said. Rounding out the bottom of the list are Manitoba, where 49 per cent say they’re planning to leave money to the next generation, followed by 47 per cent in both Saskatchewan and British Columbia.

Location isn’t the only factor playing a role in inheritance intentions. Canadian Western Bank’s research shows age is a predictor, too, and 72 per cent of those aged 55 or older expect to pass on money or assets. In comparison, only 44 per cent of people aged between 35 and 54 can say the same. Meanwhile, a third of those below the age of 35 think they won’t have anything to pass on at all.

The bank said those findings suggest Canadians — especially younger generations — are dragging their feet on estate planning, which could cause problems for their heirs down the line. Those who don’t undertake some sort of financial management may end up leaving their heirs with a burden, it cautioned in the report. And without a proper will, they also risk giving up control of who benefits from their legacy.

“While it is common for younger Canadians to put off their estate or inheritance plans, especially given many young families carry debt from mortgages, lines of credit, car loans, or even credit card debt, putting a plan in place as early as possible ensures Canadians are taking control of where their estate will be directed if they were to pass away,” the report said.

Failing to plan ahead could also lower the likelihood of leaving a living inheritance, in which people pass on cash or assets to the next generation while they’re still alive. The trend, which has been gaining in popularity, might take the form of cash gifts in lump, monthly or yearly sums, the gifting of a home, or paying for a family vacation. Not only does such a scheme allow someone to enjoy the fruits of their labour with loved ones, but it could also be a financially savvy move, with potential tax savings to be had. Still, planning ahead is key for anyone who wants to take advantage, the bank said.

Of course, looking beyond location and age, household income also plays a significant role in inheritance planning and intentions. The survey found that the more money children have, the more likely they are to initiate discussions with their parents about an inheritance. For example, 63 per cent of people who make more than $100,000 a year say they’ve had inheritance conversations with their parents. The number falls to 45 per cent for those making $50,000 or less.

The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional. No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability or its contents or for any consequences arising from its use.