Estates & Wills & Trusts

Don't rely on inheritance, Kirsh warns baby boomers

Toronto trust and estate litigator Felice Kirsh warns that while a recent study finds that over the next 20 years an estimated $1-trillion will change hands from parents to their children, baby boomers should not rely on a windfall.

"Plan your finances as if you’re not going to inherit money," says Kirsh, a partner at Schnurr, Kirsh, Schnurr, Oelbaum, and Tator LLP. "No one should wait for an inheritance to pay debts etc., as you do not know if you will inherit, you do not know when that may occur, and you do not know how much you will inherit.” 

A recent Investors Group study found that more than half of the Canadian population are expecting an inheritance of more than $100,000, and over the next 20 years the largest intergenerational transfer of wealth in Canadian history is going to take place. Read Story in Toronto Star

Kirsh notes second relationships and blended families are playing a role. "These factors could mean that what you thought you may inherit may be far less. It is also true, as people are living longer, care costs are increasing, and this can significantly deplete the final value of someone's estate."

Many see the benefits from baby boomers only having an effect on the wealthy, and in ways they are correct, says Kirsh. “I do agree that wealthy people often have wealthy children and therefore the transfer of wealth to a large degree will involve transfers from wealthy to wealthy,” she notes, adding that it is not common for wealthy families to have very poor or even moderately poor children.

On the other hand, Kirsh advises individuals to re-think the benefits of an inheritance because they do not usually come at a good cost. “An inheritance is really something you do not want. It usually means that someone very close to you has died.”

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