Reasons to talk about inheritance with your children
According to a CIBC Economics study from last year, Canadians can expect a $750 billion windfall from inheritance over the next decade. It’s a record amount, and a 50 per cent increase compared to the previous decade.
But when $750 billion changes hands it can create a lot of tension. In talking to older clients, one comment I often hear is, “I just don’t want my children and their families to fight after we’re gone.” Unfortunately, in some families, inheritance can be the ticking time bomb that sets off just such disputes.
Let’s consider some of the potential explosions:
- Adult children feeling that they are being unfairly treated (usually based on the past);
- blended families battling over “what’s ours” and “what’s (not) yours”;
- siblings expecting more based on the nature of a relationship or for having taken on certain responsibilities;
- differing beliefs regarding who deserves or needs more;
- concern over money going to philanthropic causes and not all to the family; and disputes over the cottage, the valuable art, and the distribution of personal possessions.
Is there a way to prevent this kind of fallout?
Often the best way is to talk with family members to let them know your views, thoughts and ideas, and to hear theirs.
It can be challenging for families to discuss matters of money as it can stir up feelings about the past and the future. A neutral third party can help
Some families do make this work. As a neutral advisor I can work with parents and their children by guiding them and making them feel calm and comfortable about their financial legacy. In particular, parents will know that all of their children will be taken care of appropriately and will not be left with heavy burdens.
There are many stories of families that are torn apart by an estate. Don’t let yours be one of them. Where there are already meaningful family rifts, the challenge will certainly be greater. Yet without the family talk, an estate is very likely to cause things to get much worse. In such a case, you need to have the courage to deal with some issues right now. Whether you do it alone, with the help of a financial advisor the family talk needs to happen.
Also published on Medium.