Last year, a CIBC report indicated that an estimated $750 billion in assets is expected to pass into the hands of baby boomers over the next decade. That's a lot of wealth transferred - in fact, the largest expected in Canadian history. Yet, before the windfall, many families are likely to weather storms as disputes arise between heirs over the distributions. If you're an adult child, then a recent BMO report may serve as a good wakeup call, signalling the wisdom of advance planning and communication with both your siblings and parents.
Majority of adult children ignorant about parents' estate plans
The BMO Wealth Management Report studied the impact of complex family dynamics on estate planning.
Of the over 1,000 Canadians surveyed, the overwhelming minority - only 30 per cent - had any idea about their parents' wills, selection of executor or plans on how to divide their assets after death. Adult children who were divorced or separated indicated even less likelihood that their parents would communicate their future planning with them.
Notably, nearly half of respondents felt that their parents' distribution decisions were not fair. The numbers could easily translate into more families battling it out in court after a parent's death in the coming decade.
What could happen if estate plans are not clear?
How about yourself? Do you have your estate documents in order? Do your parents have theirs? Without planning and communication, heirs and estate beneficiaries may become embroiled in disputes for a variety of reasons, such as:
· Allegations that a sibling unduly influenced the contents of a parent's will
· Claims that a parent was mentally unsound when drafting the will
· One party asserting that he or she deserves more than the other siblings' shares
· Allegations that the named executor is mismanaging the distribution
If you're an adult child, it's important to have difficult conversations about your parents' estate plans sooner than later. Take the initiative to arrange a full family discussion. Advance planning is not easy, but the efforts often go a long way in preserving peace and harmony in the wake of a parent's death.
If discord does arise, seeking the advice of an estate litigation lawyer can provide perspective and enlightenment on the legal and complex interpersonal factors involved.