Inheritance disputes in Canada are on the rise, especially in the GTA where property values are rising.
Coming decades will see massive inter-generational transfer of wealth
Over the next two decades, Canadians will witness the largest inter-generational transfer of wealth in history, according to a recent article in Maclean’s. As older Canadians reach their 80s and 90s, their Baby Boomer sons and daughters are collectively set to inherit approximately one trillion dollars. However, with such massive sums at stake, experts say that
inheritance disputes are also set to rise, particularly due to rising debt levels on the shoulders of Baby Boomers combined with rising property values in major urban areas, such as the Greater Toronto Area.
A BMO Investorline survey last year found that about one trillion dollars will be inherited by Baby Boomers from their aging parents in the next two decades, according to CBC News. The average Canadian inheritance is currently just over $96,000, although in Ontario the average is $113,500, the second highest in the country after British Columbia.
Despite such large sums, however, there is plenty of room for disappointment for those on the receiving end of such wealth. Much of the wealth, after all, is concentrated in the hands of a relatively small portion of the population. Indeed, another survey has found that Canadians typically overestimate their inheritance by almost half of what they end up receiving.
Debt and property
With expectations perhaps not always in line with reality and inheritances set to become an important issue for many families, it should come as no surprise that inheritance disputes are also likely to rise. Experts point out that while Canadians over 65 have an average of over $440,000 in liquid assets per household, Baby Boomers have just over $252,000 in liquid assets and are also carrying much more debt than their parents. Liquid assets, it should be pointed out, do not include such high-value items as homes and automobiles.
In fact, those homes could make disputes even more likely. In the Greater Toronto Area, for example, property prices have risen dramatically in recent decades. A couple who bought a home in York Region just three decades ago could expect to get much more for the same property today. Thus, according to experts, older individuals occupying homes that were bought before the real estate boom are sitting on a considerable sum in the form of fixed assets. When those properties are ultimately passed on to children or grandchildren, then the likelihood for disputes also rises.
Because of the large sums involved, estates and inheritances need to be handled with the utmost care and professionalism. However, inheritance disputes can also raise painful emotional issues for many families. As such, anybody currently involved in a will or inheritance dispute should contact an estate litigation lawyer who will not only handle such disputes with the dedication and expertise they deserve, but also with sensitivity and compassion.
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