Millennials could be in for a big surprise when their baby boomer parents pass on their wealth. A survey found that baby boomers plan to leave an average inheritance of $940,000 to their millennial children. The amount is even higher for those working with a financial adviser, with an expected average inheritance of just over $1 million. However, millennials expect to receive only $309,000 on average.
This large sum of money has the potential to complicate millennials’ financial lives if they don’t plan ahead, Sun Life said. Canada is expected to see up to $1 trillion in inheritances by the end of 2026 as the largest intergenerational wealth transfer in the country’s history. However, few are taking proper estate planning steps. Less than half of the baby boomers expecting to leave an inheritance have a financial plan in place, and just over a quarter haven’t talked to their heirs about the inheritance.
Both baby boomers and their children need to plan for this wealth transfer. It’s important to have transparent conversations about estate planning and start early, an adviser at Sun Life said. Many millennials intend to use their inheritance to cover housing and debt costs due to skyrocketing expenses.
The survey is based on responses from 750 baby boomers and 750 millennials.
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