Amid an otherwise slow, semi-locked down summer, the British Royal Family graciously supplied a stay-at-home world with a salacious blend of drama, speculation and gossip. Most of the chatter emanated from Prince Harry and Meghan Markle, who are ambitiously seeking a path to “financial independence” in the United States.
The fractured fairy tale started when Harry and his brother William, treated as equals for most of their lives – realized what their father has known all along – they are quite literally not equals among the ranks of the United Kingdom. Oh sure, Harry will still inherit millions, but his older bro will inherit far more, including the castles, crowns, cars, jewels and ultimately, the throne of England. Harry’s fate was to sit a row behind William for the rest of his life, trying not to fume about the unfairness of constitutional monarchies.
How their father, Prince Charles, and grandmother, Queen Elizabeth, handled the tense discussions of Harry’s choice to exit and how it would be funded, we may never know. But you don’t have to be royal to realize that some point in your adult life, an inheritance could really help secure your financial future. And, as Prince Charles noted some years ago, “Regrettably, it comes as a result of the death of your parent.”
Which makes it awkward. Who wants to be a reminder of mortality? Who wants to look at their parents with eyes full of dollar signs? How do you even approach the topic?
If it helps to know, you’re in good company. According to Strategic Insight, Canada is in the midst of one of the biggest inter-generational wealth transfers in history - with approximately $1 trillion in personal wealth being passed down between 2016 and 2026.
And yet, a 2018 survey by IPC Private Wealth and Environics found that 58% of wealthy Canadians have not discussed instructions for their estate with their heirs, and 12% do not even plan to have such a talk. An earlier survey, conducted by HomeEquity Bank and Ipsos in 2014, found that one in five Canadians don't know whether they’ll receive an inheritance or not.
The uncertainty goes both ways, with many parents doubting their adult kids’ ability to manage money. Strategic Insight’s data further revealed that “32% of affluent Canadians say they are worried about how their heirs will handle their inheritance; and 36% say their children don’t have the financial literacy to manage a potential windfall.”
So maybe the conversation starts here. Being an adult means maturely handling the difficult conversations and planning your finances realistically. Sharing your own financial plans with your parents can demonstrate your capabilities and open the door to a discussion about their estate plans. A financial planner or tax advisor can suggest where there may even be opportunities to transfer some assets before death. Whether you invite your brother to the meeting, well, that’s another matter.