4 new learnings on the intergenerational wealth transfer

We have been tracking the behaviours associated with estate planning in Canada for more than a decade and have recently published updated research on intergenerational wealth transfers. Over time, we have seen behaviours evolve as the economic environment has changed. This year is no different.

There is a fundamental shift emerging that is broadening both the scope and impact of intergenerational discussions.

Four insights will need to be addressed.

1. Fewer Canadians are planning to leave an inheritance

Seven in 10 retirees (71%) and 55% of those not retired are planning to leave an inheritance. That’s down from 78% and 67% respectively in 2021. While those working with a financial advisor intend to leave more than those without an advisor, those rates are declining too.

Canadians are worried about economic uncertainty. Cost of living, tariffs, global conflicts and supply chain disruptions impact our state of mind and behaviour. People are uncertain about their financial future and don’t want to be a burden for the next generation.

As a result, 60% of Canadians don’t expect an inheritance. That’s up 10 points over our 2021 results.

2. Parents are helping their kids buy a home

For many, the way to build wealth in Canada involves home equity. People take a mortgage. And after years of payments and rising home prices, they are left with a significant asset that could be transferred to the next generation.

That approach came under pressure as home prices got out of reach for many younger Canadians. In 2024, 31% of first-time homebuyers received a gift from family to help purchase their home — compared to 20% in 2019.

From a behavioural perspective, this change is significant. We expect it to be increasingly common in the years ahead.

3. Inheritances are getting more generous

Those who receive an inheritance report that it makes up a sizeable portion of their overall wealth. With 50% of inheritances now expected to be greater than $100,000, what are the implications?

A large influx of money needs to be considered within a broader financial planning context to have lasting value. Encourage clients to think of an inheritance like a larger-than-usual bonus. Treat it like an injection of funds that can be used to improve the client’s long-term financial standing. It’s not free money to spend frivolously.

4. Communication matters

We observed a reduction in conversations taking place between family members.

That said, we did see a modest increase in financial advisor engagement. Almost half of working Canadians (45%) have talked with a financial advisor about an inheritance. Among retirees, 28% have done so.

The tipping point for initiating conversation is typically when assets are greater than $100,000 — at least with a spouse or partner.

Nearly half of those not retired (45%) have introduced a beneficiary to their advisor — that’s a modest increase relative to 2021. Just 37% of retirees have done the same.

Three advisor actions

Having a financial advisor increases the confidence, action and outcomes with respect to estate planning transfers of wealth. But advisors are still underutilized.

Three actions advisors can take:

1. Ensure inheritances are part of any financial planning conversation. That should start as early as age 35 and no later than age 45. Youngers Canadians are more engaged with their finances today than previous generations. Advisors need to ensure clients understand the importance of inheritances from a longer-term financial planning perspective. That includes peace of mind today and recognition of the financial impact tomorrow. Inheritances should be identified, incorporated and updated throughout the financial planning process, without giving beneficiaries the impression that anything is available to them in the short term.
2. Broaden the conversation. Initiate generational finance discussions to ensure the desires of those providing an inheritance are accomplished and the gift is optimized for beneficiaries. This is particularly important for clients who are transitioning and/or living in retirement. Ensure you meet with beneficiaries to reinforce confidence and understanding. If you are the advisor to a beneficiary, consider asking to meet with the benefactor. A key part of any discussion should include how to share wealth today without derailing the financial plans people have worked so hard to achieve.
3. Address the elephant in the room. No-one wants to be a burden on their children. Most retiring and retired clients are concerned about today’s economic uncertainty. Reach out and instil confidence. If you have planned properly, this is the time for you to remind them of the steps they have taken to secure their future and provide a legacy.