Trillion Dollar Wealth Transfer - Myth or reality?

Canadians' expectations for inheritance may fall short - especially if those over 60 spend it first

WINNIPEG, Feb. 8, 2012 /CNW/ - More than half of Canadians are expecting an inheritance (53 per cent) and, of those who believe they know the size, 57 per cent expect the value will be over $100,000. But according to the latest research from Investors Group, the estimated $1 trillion dollar transfer of wealth forecast to occur in the next 20 years may result in fallen expectations for some.

While nearly half of Canadians who have already received an inheritance prefer not to disclose the size (47 per cent), those who indicated the amount received an average of $57,000. One in five (18 per cent) who have already inherited said they received $100,000 or more while one quarter (26 per cent) received less than $5,000.

Nearly half (45 per cent) of Canadians aged sixty or more are concerned they are going to need their savings to fund their retirement and won't have money left to give to their survivors. Significantly, only one-quarter (25 per cent) are willing to make personal sacrifices to ensure an inheritance for their family.

"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," says Christine Van Cauwenberghe, Director, Tax and Estate Planning at Investors Group. "This has financial planning implications and strategies that must be considered by both recipients and benefactors - ranging from retirement planning and saving to tax planning and insurance planning."

Expectations decrease with age

While the majority of Canadians (53 per cent) think they will receive an inheritance, expectations decline with age: 80 per cent of Gen Y (Canadians aged 18-29 years) expect an inheritance but only 62 per cent of Gen X (Canadians aged 30-44 years) and less than half (48 per cent) of the boomer generation (Canadians aged 45-64 years) assume they'll be getting an inheritance.

"Knowing the dollars and cents behind your inheritance can have an impact on your financial plans," says Van Cauwenberghe. "It is smart to know what you can expect so you can plan accordingly and family dialogue is a good place to start."

Having "the talk"

The poll reveals that many families are not taking the time to discuss or deal with inheritance issues. Four-in-ten Canadians whose parents have a will (39 per cent) say they have not discussed the terms of the will with their parents while sixty-one per cent of Canadians with deceased parents who had a will, admit they never had the talk.

"When it comes to wills in Canada, there's not enough action and certainly not enough talk," Christine says.  "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."

Interestingly, those who have discussed will and estate details with family members indicate it was not a difficult conversation. Three-in-ten (31 per cent) said the discussion was very easy while only three per cent said they found it very difficult.

About the Survey Methodology

This poll was conducted online within Canada between January 12 and January 25, 2012, among 1,002 adults (aged 18 and over).   Data were weighted where necessary to bring them into line with their actual proportions in the population. Respondents for this survey were selected from among those who have agreed to participate in Harris Decima surveys. Because the sample is based on those who agreed to participate in the Harris Decima panel, no estimates of theoretical sampling error can be calculated.

About Investors Group

Investors Group, founded in 1926, is a national leader in delivering personalized financial solutions to Canadians through a network of approximately 4,600 Consultants located throughout Canada. In addition to an exclusive family of mutual funds and other investment vehicles, Investors Group offers a wide range of insurance, securities, mortgage and other financial services. Investors Group is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada's premier financial services companies with over $122 billion as of January 31, 2012 in total assets under management.

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For further information:

Ron Arnst 
Investors Group 
(204) 956-3364 
ron.arnst@investorsgroup.com

Teresa Pagnutti or Lisa Mills
Environics Communications
416-969-2721/ 416-969-2831
tpagnutti@environicspr.com/lmills@environicspr.com