There has been a noteworthy shift emerging in Canadian households over the past few months and years: more and more parents and grandparents are stepping in to provide financial support to both their grandchildren and adult children. This noteworthy change is driven by the pressures of affordability and inflation. In a recent article published by Wealth Professional, highlighting data from BMO Financial Group, one statistic stated that approximately 45% of Canadian parents and grandparents intend to offer financial assistance within the next year.
One interesting thing to note is the way the financial support is changing. Estate planning transfers were historically earmarked for major purchases, such as home downpayments, while today, the aid frequently covers everyday expenses. In this survey, 22% of Gen Z Canadians expect to receive help with general living expenses. Approximately 16% of the Gen Z population expect help with student loan obligations and 13% expect help with costs related to raising their own children.
This emerging trend of “in-life” wealth transfers has important implications for both estate planning and inheritance. Many Canadians in their younger years expect they will receive a living gift or an inheritance, but fewer understand the size of the gift, the timing of the gift, and the nature of what will actually be passed on. Without a clear dialogue surrounding these expectations, tension and misalignment across generations can occur.
At BlueRock Wealth Management, we believe that open communication and thoughtful estate planning early on are key. Engaging in structured conversations about estate planning, particularly those about living transfers, legacy goals, and intergenerational support, can help you preserve both your wealth and your family relationships. We can help you explore strategies for you to accomplish this, so contact us today to speak with an advisor.