Report on Family Dynamics and Estate Planning
BMO Wealth Management recently released a report entitled “Estate planning for complex family dynamics,” which details the findings of a survey commissioned to ask Canadians for their views on estate planning, inheritance, and communications about these topics within their families. The results of this survey illustrate the importance of communication in avoiding family conflict, particularly in situations where a parent is in a second marriage or common-law relationship.
Only 30% of respondents indicated that their parents had discussed their estate plans or shared details about their wills with them. The report suggests that parents who were separated or divorced were less likely to discuss their estate plans with their children.
The survey respondents were asked whether they believed the distribution of their parents’ estates had been fair. About half of the respondents believed the distribution had not been fair. The report states that respondents whose parents had any kind of relationship other than a first marriage were most likely to feel that the distribution was not fair. Of the respondents who believed the distribution was fair, three-quarters responded that their parents had divided the estate equally. The remaining quarter of respondents who thought their parents had distributed their estates in a fair way reported that the unequal distribution was justified.
When asked about what would constitute a fair distribution of assets, respondents to the survey gave a wide range of answers. Most respondents believed that children of a testator should be treated equally. A minority of respondents believed an unequal division might be fairer, for reasons such as financial need or a particularly close relationship with one child.
The dynamics of a blended family are fertile ground for conflict. Communication with all interested parties about what to expect after the death of a parent or spouse can help ease tensions and avoid surprises after death that often lead to estate battles.
You can find a copy of the full report on the BMO website.
Thank you for reading.