Clashing expectations are setting the stage for a cross-generational war over inheritances between Baby Boomer parents and their Millennial children.
A survey by investment bank Natixis recently found that 68 per cent are anticipating a financial windfall whenever their parents pass on. However, many of them could be in for a rude awakening, since the same poll revealed the vast majority of Boomers do not expect to have any money left over at the end of their lives.
To make matters worse, the survey suggests younger people underestimate the effect of inflation in their legacy calculations, which means that whatever money they do get will be worth less than they were planning for.
All of these disconnected expectations are a recipe for estate disputes when reality strikes, and surviving family members realize there are too many of them chasing too few assets.
Unfortunately, I’m reminded over and over again in my practice that it doesn’t take huge sums of cash to spark a legal fight over an estate. I’ve seen too many families ripped apart at the seams over arguments driven more by emotions than hard figures, because one person got less than they had hoped or someone else got more than they were supposed to.
Luckily, there is a solution for testators who wish to avoid an ugly family feud after they’re gone: open and honest communications with your intended beneficiaries.
By giving your loved ones an idea of what they can expect from a will, you can nip a lot of issues in the bud before they develop into something more damaging. Even if someone is getting less than they had hoped, setting realistic expectations ahead of time will take a lot of the heat out of the situation when estate administration begins.
The most likely estates to be contested are those left by a person with no will at all, a risk that an astonishing 44 per cent of Baby Boomers surveyed by Natixis are currently taking.
Thinking or talking about your own death is never much fun, but your friends and family will definitely thank you for having an estate plan in place if it saves them the hassle of dealing with an intestacy at an already emotionally difficult time.
When someone dies without a will in Ontario, the government effectively decides what will happen to their property – via the province’s Succession Law Reform Act, which sets strict rules for the distribution of assets.
But the Act makes no provision for the individual circumstances of the deceased, which can lead to issues, especially for those with anything but a conventional family arrangement.
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