Bucket list or inheritance, or both
Are you expecting an inheritance from your parents? Well, your parents may have different ideas.
According to a survey, although 62 per cent of those aged 30-44 anticipate receiving an inheritance, 45 per cent of Canadians aged 60 and over are concerned that their savings will be depleted during their retirement and they will not have money to leave behind. And 25 per cent are not willing to make any personal sacrifices in order to leave others an inheritance.
It’s plain that seniors intend to enjoy their retirement years, and as people live longer and have higher expectations for their retirement, younger generations may have to adjust their own expectations about the anticipated transfer of wealth.
For seniors expecting a long and active retirement, knowing how much you have and will need to pay for the lifestyle you want, along with the additional medical and other expenses that inevitably come along with aging, is a vital ingredient of a financially comfortable retirement – and that takes careful financial planning.
If you are concerned about leaving an inheritance to your adult children (or others) that takes careful estate planning, as well.
For adult children, the amount of your inheritance will have an impact on your financial planning, so it’s important to know what you can expect — and family dialogue is a good place to start.
Broaching the sensitive topics of wills and estate details with loved ones can be daunting, but having “the talk” early on can provide security for planning and make the process easier when the time comes. In fact, your parents may be waiting for an opportunity to have “the talk” and you can help facilitate it in your role as a supporter and information gatherer.
Here’s what you should include in the discussion: 1. Sources of income. 2. Registered and other investments. 3. Expenses now and as they are likely to escalate with age.
4. Insurance. What coverage do they have or need? 5. Existing wills. 6. Enduring powers of attorney for property (in Quebec, mandates in anticipation of incapacity).
7. Powers of attorney for personal care, living wills, health care directives.
8. Location – know where wills and other legal papers are kept; know the location and content of their bank accounts and safety deposit boxes. Are you leaving an inheritance? Are you expecting an inheritance? Have “the talk” and find out. And to be sure you are taking full advantage of the many financial and estate planning strategies available to parents and their adult children, having the talk with your professional advisor is also a very important step to provide peace of mind.
Jason Blucke is a Certified Financial Planner and a Chartered Investment Manager and runs a private wealth management practice with Investors Group Financial in Kelowna. His team specializes in helping business owners, professionals and retirees maximize and organize their wealth. He can be reached at Jason.Blucke@investorsgroup.com or toll free at 877-541-2255, ext. 5249.