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Affluent Canadians plan to leave one-third of their wealth to children, says BMO

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Affluent Canadians – those with investable assets of CAD1m or more – plan on leaving almost one-third (30 per cent) of their wealth to their children, according to a study by BMO Harris Private Banking,

The survey reveals that they plan to divide the rest of their estates as follows:
 
•             Spouse or partner (60 per cent)
•             Other family members (four per cent)
•             Charities (three per cent)
•             A board or company (three per cent)
 
Additionally, almost 80 per cent of high-net worth Canadians feel that their children are ready to manage their inherited wealth. This sentiment could perhaps be attributed to educational efforts; two-thirds (65 per cent) reported that they spend time educating their kids about money matters.
 
"Affluent Canadians value leaving a legacy and will be passing on a significant portion of their wealth to their offspring," says Yannick Archambault, vice president and COO, BMO Harris Private Banking. "However, with wealth comes complexity. It's reassuring to see that so many are taking the time to help their children become more savvy about finances."
 
According to the study, just a quarter (26 per cent) of high-net worth Canadians feel that their children will be better off financially than them. Forty-one per cent think that their children will be worse off than them, with 60 per cent believing that this will be because of the state of the economy.
 
Affluent Americans are more optimistic about what the future holds for their children compared to their northern neighbours; 43 per cent in the US say they believe their children will be better off financially and 35 per cent believe they will be worse off.
 
"Many are still feeling the effects of the 2008 recession, so it's not too surprising that people may not be feeling upbeat about what the future has in store for their children," says Archambault. "While we don't have the ability to guarantee bull markets and a strong overall economy for our children, there are things we can do to ensure they're well positioned to weather any financial storms. Teaching our kids about personal finance issues is a good start but it's also important to be transparent about family finances. The earlier a family is committed to educating the next generation, the better off they will be when the transfer of wealth occurs."

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