Baby Boomers need to get a move on with their estate plans.
Investment Executive magazine recently reported on a survey of Boomers that found a stunning 44 per cent of those who planned to leave an inheritance have yet to get an estate plan in place.
With the country’s largest intergenerational transfer already underway – around $1 trillion is expected to be left behind by Canadians Boomers between 2016 and 2026 – I can only hope that the 750 respondents to the Ipsos survey, who were aged between 58 and 77, are unrepresentative of their generation as a whole.
Otherwise, a large swath of the population may be running out of time to take control of their legacies, depending on where exactly they fall in that age range.
Thinking or talking about your own death is never much fun, but your friends and family will definitely thank you for getting your affairs in order 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.
In addition to the low rate of estate planning, the Ipsos survey also revealed that 26 per cent of Boomers leaving an inheritance had not even discussed their plans with their intended beneficiaries.
Outside of an intestacy, my many years of experience have shown me that mismatched expectations are one of the biggest causes of estate litigation. Luckily, there is a solution to this particular problem for testators who wish to avoid an ugly family feud after they’re gone: open and honest communications with your heirs.
I’ve seen too many families torn apart by financial squabbles after the death of a loved one, and in my experience, it doesn’t take a huge sum of money to spark arguments whose true drivers are more emotional than anything else.
If you can give your beneficiaries an idea of what they can expect from a will, it will 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.
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