Legacy in limbo? RBC Wealth Management research shows only 22 per cent of high net worth Canadians have an inheritance plan

TORONTO, Jan. 31, 2017

• Lack of confidence in wealth preservation: almost 60 per cent are not confident their children will both preserve and grow their wealth
• Heavy burden on future generations: 54 per cent plan to pass on their wealth only upon death, yet majority do not have a full inheritance plan in place

TORONTO, Jan. 31, 2017 /CNW/ - When it comes to giving and receiving wealth, most high net worth (HNW) Canadians are woefully unprepared to transfer their inheritance, with less than one-in-four having a full plan in place. Yet within a generation, an estimated $400 billion CAD is going to change hands.

According to new research by RBC Wealth Management, conducted in collaboration with Scorpio Partnership, not only do the majority of lack a detailed plan to pass on their assets, only one-third are actually prepared to receive a financial gift.

"Our research shows that inheritance typically begins at age 29, so Canadians need to act now to ensure their legacy lasts," said Tony Maiorino, head of RBC Wealth Planning Services. "There's no time like the present to adopt a 'learn before you earn' strategy so the next generation can be educated and prepared to stand on their own financial footing."

The research – undertaken from June to August 2016 – reached out to 3,105 individuals of HNW individuals from Canada (1,054), the United Kingdom and the United States, who have an average net worth of $4.5 million US (in Canada, the average was $3.8 million CAD). These individuals included men and women, professionals, retirees and business owners, as well as givers and receivers of wealth.

Other key findings from the report include:

• Almost 60 per cent of Canadian parents don't feel confident that their children will preserve or grow their inheritance, yet nearly 70 per cent listed their kids as top inheritors.
• The earlier children are educated, the more confident they will be at making sound financial decisions. In fact, 66 per cent of those who began structured financial education before the age of 18 now rate themselves as confident.
• Canadian children remain in the financial dark with only 37 per cent of their parents comfortable discussing all the details of their inheritance plans.
• Over half (56 per cent) of Canadian inheritors had no guidance before receiving their financial windfall.

"When it comes to navigating succession planning, we know it's an emotionally charged topic and families generally prefer to keep their financial dealings private," concluded Leanne Kaufman, head of RBC Estate & Trust Services. "Speaking with a professional and opening your network can help ensure the nest egg Canadian families have built is protected across generations."