Should you give your children their inheritance now?

Carefully consider all the consequences before any assets change hands.

Gail Bebee 9 March, 2018 | 6:00PM
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The baby boomers, that great swell of Canadians born in the first 20 or so years after the Second World War, are retiring, and judging from Statistics Canada data they are retiring in decent financial shape. In 2016, the median net worth for a family with the major income recipient aged 55 to 64 was $669,500. For a senior family (eldest partner is 65 or more), this figure was $762,900. These numbers are set to rise substantially as this cohort will inherit an estimated $750 billion over the next decade according to a 2016 CIBC Capital Markets report

Not surprisingly, some seniors and pre-retirees are giving their children at least some of their inheritance now. The money has a positive impact on their children's lives. It can allow them to buy a home, and the parent(s) can witness their children enjoying the money. However, careful evaluation of the pros and cons of such a gift is essential before any assets change hands. A living inheritance will not suit all family circumstances.

"If you are considering a living inheritance, you must first make sure your own financial house is in order before you start giving your wealth away," says Ian Black, a fee-only financial advisor and portfolio manager at Macdonald, Shymko & Co. Ltd. in Vancouver.

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About Author

Gail Bebee

Gail Bebee  Gail Bebee is an independent personal finance speaker, teacher and the author of No Hype--The Straight Goods on Investing Your Money. She can be reached at gbebee@gailbebee.com; her website is www.gailbebee.com.

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