One of the accepted truisms of the last decade or so it that, by
reason of an ageing population, there will be huge impacts on our
economic and societal structures, most of which are reported rather
The media is tasked with making sense of all the change that is
occurring and, therefore, must have a "lens" through
which to capture events and significant shifts. The result is
that the media often moves in a pack-like manner, latching onto an
idea and examining all of its angles. However, every once in
a while, someone looks at that data or trends from a different
perspective. What had once been accepted as a truism, becomes
open to challenge and debate.
There are a few hints that accepted truisms are being refined in
the discussion of the wealth shift that is expected to take place
between baby boomers and their parents, and again between baby
boomers and their children. Certainly those lawyers involved
in planning and litigating estates can point to an increase in
large estates, primarily due to the increase in real estate
values. However, there remain many smaller estates.
Many individuals are living healthy lives well into their 80s and
beyond, meaning that wealth transfers are occurring later.
This reality led the National Post, in one of its recent themed
publications, to highlight a growing problem: "a nation of
waiters". Indeed, it was not referring to those working
in the food service industry. The article looks at an
emerging trend of people banking on their inheritance, and spending
it before it arrives.
David Foot, author of Boom Bust & Echo, is quoted in this
article cautioning that all of the statistics one hears regarding
the impending wealth transfer must be seen as averages. There
are very wealthy individuals who bring up the numbers and many more
individuals who do not have large estates. Further, he notes
that the baby boomers often came from larger families, where the
estates are divided amongst four or more children. He makes
the point that the boomers only have, on average, 1.5
children. The greater wealth transfer might take place in a
more gradual pace, over two generations. This is an
interesting perspective that does not challenge outright the
well-known 2006 Decima Research study that forecasted over $1
trillion dollars passing to the next generation in 20 years.
That analysis is still accurate, but looking at the issue with a
little more realism just might mean that every Canadian over the
age of 55 should not expect an early retirement as a millionaire
The best advice from those in the business of wealth
transfer? Continue to do the right things. Do not rely
on an inheritance. Lead your own healthy and productive
life. Create your own wealth. Do your own estate
planning. If you play the new Canadian "waiting
game", you just might find yourself disappointed.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
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