As Canada's population ages, a massive wealth transfer is looming - one experts say many households aren't ready for.

The Great Wealth Transfer, which predicts a staggering $1-trillion reallocation of wealth, has raised concerns about Canadians' preparedness for what will happen to their estate once they pass away.

This concern is not without merit. According to the The Inheritance Gap Report, released by Willful, only 51% of Canadians have a will, and nearly a quarter have no end-of-life planning documents at all (1). Younger Canadians are especially unprepared, with 62% of Gen Z report having no estate plans in place.

Even when people recognize the importance of planning, follow-through is limited. While 75% of Canadians believe estate planning is important, 46% say their financial advisor has never discussed it with them. Family conversations are often incomplete too. Although 59% of Canadians say they've talked about end-of-life wishes, only 36% both know their family's wishes and have shared their own.

Estate planning isn't just for the wealthy or elderly. Without a plan, Canadians face legal disputes, higher taxes and unintended consequences for loved ones. For example, if someone dies without a will, provincial laws determine who inherits their assets, which may not align with their wishes. Families may end up in conflict over property or finances.

Digital assets, including online accounts and cryptocurrencies, can be lost without clear instructions. Beyond financial issues, parents without a will risk leaving guardianship of their children to the courts. Proper estate planning, however, helps prevent these problems and ensures your wishes are respected.

Importantly, estate planning also goes hand-in-hand with legacy planning - thinking about the values, assets and impact you want to leave behind. That could mean funding a grandchild's education, supporting a cause you care about or ensuring a family business continues for the next generation.

A complete estate plan goes further than naming beneficiaries. It can include trusts for minor children or family members with special needs, charitable donations or business succession plans. Life insurance, powers of attorney for health and finances as well as a record of digital assets are also key components of a modern estate plan.

Statistics Canada data shows Canadians increasingly hold complex assets - from savings and investments to small businesses - making clear instructions more important than ever (2).

Tips to get started

• Create a will and update it regularly
• Designate powers of attorney for finances and health decisions
• Document digital assets and instructions for their management
• Consult professionals such as lawyers or financial advisors
• Consider trusts or life insurance to provide for dependents or cover taxes
• Explore legacy planning to align your wealth with your values and family goals

With an estimated $1 trillion set to transfer over the coming decades, Canadians who take proactive steps now can protect their families, avoid costly mistakes and ensure their legacy is preserved into the next generation.

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Willful: The Inheritance Gap: Financial advisors are losing the next generation, by Emily Chioconi (1 ); Statistics Canada: Household net worth rises with gains in both financial and non-financial assets (2 )

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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