The majority of affluent Canadians have not discussed inheritance with heirs

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Fifty-eight per cent of wealthy Canadians have not discussed instructions for their estate with their heirs, according to a new poll by IPC Private Wealth of Investment Planning Counsel. Of this group, 12 per cent do not plan to talk about their inheritance plan at all with their beneficiaries.

IPC Private Wealth partnered with Environics Research to do the poll among 400 Canadians with at least $500,000 in investable assets.

Lack of financial literacy

The poll also showed that 32 per cent of affluent Canadians say they are worried about how their heirs will handle their inheritance; and 36 per cent say their children don't have the financial literacy to manage a potential windfall.

However, only 19 per cent say they have introduced their children to a financial advisor or have taken them to a planning meeting with the person currently managing their money (18 per cent), revealed the IPC Private Wealth poll.

Blended families

Those who are part of a blended family are more likely to indicate a lack of trust in their beneficiaries' ability to manage their wealth (28 per cent), according to the poll.

They also share a range of other concerns, such as whom to appoint as the primary beneficiary (15 per cent), how to fairly divide assets (13 per cent), and the fact that they haven't spoken openly to their spouse about their estate plans (13 per cent). Almost 20 per cent of the 400 surveyed were part of blended families.

"The topic of inheritance is an important issue that requires communication to help the next generation succeed in handling new found wealth," says Sam Febbraro, Executive Vice President of Investment Planning Counsel. "Children need to understand their parents' financial objectives for the money that they are leaving behind so they can continue their legacy."

An advisor can play quarterback role

"There is an opportunity for financial advisors to start that dialogue with their clients on inheritance planning and help educate the next generation on how to steward their finances," says Paul Wylie, Senior Vice President of Business Development at IPC Private Wealth. "Advisors can play a quarterback role and help clients overcome their fears over their heirs' ability to manage their wealth."

As published in The Insurance & Investment Journal by The IIJ Staff Jan. 30, 2018  09:45 a.m.

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