Leaving a financial legacy is a key goal
TORONTO, June 24, 2013 /CNW/ - The majority of Canadian adults (67 per
cent) either don't know what will happen to their debt when they die,
or are misinformed about how their debt will be treated upon their
passing, according to a survey of 1,500 Canadians released today by
Lawyers' Professional Indemnity Company (LAWPRO). The survey provides
data about Canadians' understanding of debt and death. It reveals a
significant knowledge gap - only one third of Canadians understand how
their assets and debt will be managed when they die.
"Debt and death are sensitive and sometimes uncomfortable subjects to
consider, but clarifying how your assets and debts will be treated upon
your passing can provide peace of mind and help you understand how
loved ones will be impacted," said Ray Leclair, Vice-President, Public
Affairs at LAWPRO. "Over half of Canadians would like to help their
family be more financially comfortable when they pass away - a lawyer
can provide advice and guidance to help make this legacy a reality."
Interestingly, age and experience aren't predictors of financial and
legal understanding of debt and death issues - 42 per cent of Canadians
aged 55+ are misinformed about what happens to their debt when they die
- the largest percentage across the demographic groups.
Survey data showed a wide gulf between people who want to leave their
families in financial comfort (56 per cent), and those who would like
to leave other types of legacies: 12 per cent of people wished to leave
a lasting impact on others instead of a financial contribution; 11 per
cent wanted their prized possessions left to very specific
beneficiaries and organizations, and three per cent wanted to leave
money to their favourite charity/charities or create an endowment fund.
Two per cent of Canadians responded that they have non-traditional
ideas for their legacy, including giving assets to friends and
providing funds to care for their family pet. Alternately, some planned
to simply spend all their money before they died.
Some Canadians had not thought about the legacy they wanted to leave
when they passed (15 per cent), while others declared that they felt
comfortable passing with debt on the books (12 per cent). A number of
people surveyed believe that life and mortgage insurance policies would
cover outstanding debt, which alleviated their concerns.
Home owners more educated about death and debt
Home owners have greater awareness about what happens to their debts
when they die and are more inclined to leave a financial legacy to
family, compared to renters. While 37 per cent of home owners
understood how their debts would be treated upon their passing, only 28
per cent of renters knew. Furthermore, 62 per cent of home owners
surveyed wished to help their families be more financially comfortable
upon their death, versus 48 per cent of renters and 30 per cent of
people in other living situations.
"When people consult a lawyer when purchasing a home, one of their
largest investments, discussions often arise about getting a will and
estate planning," adds Leclair.
Men better informed than women
The survey also showed that 32 per cent of women simply don't know what
happens to their debt when they die, compared to only 24 per cent of
men. Overall, men are more informed about how their assets and debt
will be dealt with after death, with 37 per cent of men understanding
the process, versus 30 per cent of women.
Joint ownership and outstanding loans are often misunderstood
Nearly two thirds of Canadians (65 per cent) don't appreciate the risks
of having assets in joint ownership with children or others before
their death. Also, one third of Canadians don't know what happens to
loans to children/heirs or others upon their death.
Before sharing assets with a child, parent or relative, a lawyer should
be consulted to better understand how ownership rights could be
impacted by other debt obligations.
Additional survey findings:
- People with children were more inclined towards leaving a financial
legacy - 66 per cent of people with children cited this goal, compared
to 53 per cent of people without children.
- When asked what their greatest worry about leaving debt behind after
death was, some of the more interesting individual responses were:
"dead people don't worry" and "more worried about being totally broke
before I die."
Canadians can find a lawyer through a variety of sources:
- Referrals from friends and family
- By looking up a lawyer in a directory maintained by a provincial law
- Workplace benefit programs often provide lawyer referrals through
Employee Assistance Programs (EAPs)
- The locate-a-lawyer feature for obtaining referrals to real estate
lawyers on the TitlePLUS website, titleplus.ca.
Lawyers' Professional Indemnity Company (LAWPRO®) is owned by the Law Society of Upper Canada and licensed to provide
professional liability insurance and title insurance in numerous
jurisdictions across Canada. Through its malpractice insurance program,
LAWPRO insures about 25,000 practising lawyers in Ontario, as well as
providing them with risk and practice management programs to assist
them in their law practices under the practicePRO® banner. LAWPRO's TitlePLUS® title insurance program is available to more than 4,500 lawyers across
Canada and Quebec notaries to better meet their clients' needs for
professional legal advice and superior protection for their real estate
From April 11th to 12th 2013 an online survey was conducted among 1,500
randomly selected Canadian adults who are Angus Reid Forum panelists.
The margin of error—which measures sampling variability—is +/- 2.5%, 19
times out of 20. The results have been statistically weighted according
to region (and in Quebec language), gender, age, income, and education
Census data to ensure a sample representative of the entire adult
population of Canada. Discrepancies in or between totals are due to
For further information:
Hill+Knowlton Strategies for LAWPRO
Hill+Knowlton Strategies for LAWPRO