Amid economic uncertainty, some parents are concerned they may not be able to afford leaving an inheritance.Nicolas Hansen/iStockPhoto / Getty Images
Affordability concerns and trade tensions between Canada and the U.S. have many parents worried about whether they will be able to leave an inheritance for their children.
Four in five Canadian parents say the rising cost of living is the greatest threat to their ability to pass down their wealth, a report released Wednesday from the Money Wise Institute found. Nearly 60 per cent expect to spend most of their assets during their lifetime.
Yet while older Canadians are concerned they may not have enough to leave behind, many young adults are banking on an inheritance to secure their financial future. More than half of millennial and Gen Z respondents in the report said they expect to receive a windfall.
That gap in expectations – widened by economic headwinds and market volatility – is exposing a lack of communication and planning within many families, financial planners say.
“The cost of living is rising, and now with the tariffs, the uncertainty, and still high prices – it really is affecting Canadians,” said Kelley Keehn, co-founder of the Money Wise Institute, a financial education company based in Toronto.
“They’re worried they might not be able to leave as much. Their businesses may not be worth as much. Their homes may not be worth as much.”
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Ms. Keehn said trade disputes and recent geopolitical instability are quietly eroding wealth. From higher prices on goods to losses in investment portfolios, she said the ripple effects can be far-reaching.
“That could affect the value of your inheritance,” she said. “It adds more uncertainty to what’s already such an emotionally charged process.”
Despite all this, many families still don’t talk about money, said Jeff McCartney, a certified financial planner at Objective Financial Partners based in Markham, Ont.
“Maybe you don’t have as much money as you think you should have, and you’d rather not show your kids that you’re human,” he said. “On the other side of that, some parents feel it’s none of their kids’ business. But I would argue that attitude should go the way of the dinosaur.”
The lack of communication can leave younger generations in the dark – or overly reliant on money that may never come. One in four millennials and Gen Z respondents surveyed by the Money Wise Institute said not receiving an inheritance would affect their financial plans.
“But if not receiving an inheritance will impact your financial plan,” Mr. McCartney said, “then I’d argue you don’t actually have a financial plan.”
Younger Canadians should leave any expected windfall out of their plan to safeguard against a potentially unreliable inheritance, Mr. McCartney said. If they do end up getting an inheritance, “they can view it as something extra,” he said.
At the same time, it’s becoming less realistic for parents to be able to fully fund their children’s financial goals, said Greg Moore, a partner at Richter Family Office in Toronto, which helps individuals and their families plan for their financial futures.
He said a lot of families he works with “are very anxious about being able to support their kids and being able to buy a home in the city of their choice, given the high cost of living and high cost of real estate.”
Nearly a quarter of those surveyed said they feel guilty about prioritizing their own financial health over leaving a legacy.
But Mr. McCartney says that feeling is misplaced, and that parents’ well-being should come first.
Financial experts say the best way to manage expectations is to start discussing them openly. “Communication in many respects is the key here,” Mr. McCartney said.
While those conversations can feel daunting, a good way to ease into them is to start small. Ms. Keehn recommends beginning with a conversation about values, rather than numbers.
“That’s a safe place to start,” she said. “It’s a great bridge to a broader conversation.”