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A client (or friend, or my mother…I can’t quite remember who) once referred to her children as “waiters,” as in, “They’re waiting for me to die.”
To this point, a recent Globe and Mail article by Rob Carrick warns against children relying on an inheritance to bail them out. Read Globe and Mail
The article refers to an oft-quoted report from 2006 that suggested that $1-trillion ($1,000,000,000,000) will be inherited in the next 20 years. The article suggests that this number might be less today, due to increased debt load, falling property values, weak investment returns and longer lifespans. However, whatever the number may be today, it is still a significant one.
The article cautions children from relying on these numbers and a potential inheritance to bail them out of trouble. Carrick writes, “As for people counting on an inheritance, that’s only one step away, in financial planning terms, from waiting for a lottery win.”
As ill advised as it may be, 53 per cent of Canadians are expecting an inheritance, and 57 per cent of those who think they know what they are getting expect it to be in the six-figure range.
However, those expecting a big inheritance may be disappointed. Second (or third, or fourth…) relationships may eat into their inheritance. Further, seniors are living longer, and the costs of senior care can take up a large portion of a senior’s savings. Coupled with this is the fact that government pensions may not be able to provide significant assistance.
The message seems to be to live within your means, and plan for your own future needs and well-being. Don’t spend your inheritance before it comes in.