Despite experiencing one of the worst financial crises in decades, baby boomers don't expect inheritances from older generations to be affected, according to a BMO Retirement Institute study released Wednesday.
Almost a third of Canadian boomers expect to receive an inheritance from someone in their immediate or extended family. The survey found less than a third of those expecting an inheritance felt it would be smaller than they previously thought due to the recent economic crisis.
Overall 70% of Canadians believe that future financial legacies will be unscathed by current economic conditions. Less than 3% of boomers said they won't be able to leave an inheritance because of the recession.
Much of this confidence, however, is not based on professional advice. The survey found that 80% of boomers and 77% of seniors have not spoken to a financial adviser about what to do with their inheritance. The majority seem to want to keep it that way as 64% of boomers and 52% of seniors do not plan to talk to an adviser about their inheritance plans.
But the study noted without consulting an adviser, retirees may not have a complete picture of their total wealth or understand the tax issues, and the probate, executor and trustee costs involved in passing on an inheritance.
About 25% of boomers said that, because of the recent economic downturn, they will be relying more heavily than expected on their inheritance to reach their financial goals.
Tina Di Vito, director of retirement strategies at the retirement institute, said, "Keeping your intentions a mystery until death can have negative consequences. The lack of open conversation between generations can be a major contributing factor to poor inheritance and estate planning."