Fears of discussing big financial issues mean Canadian families risking long-term strife, says new poll
Investors Group poll shows adult Canadians and their aging parents are walking into potential quagmire by not talking about estate plans
Winnipeg, MB – June 28, 2005: There are no two tougher topics to discuss than death and money - except when both need to be spoken about together. New research from Investors Group shows that many Canadians have a tendency to avoid discussions about money with aging parents as long as they can. For example, nearly half of Canadians under 45 say they have not talked with their parents about their funeral plans or leaving a legacy for young generations in the family. While the likelihood of discussions about wills and estates increases as children and their parents get older - experts caution that delaying the discussion of important estate planning details can lead to pain and resentment.
The release today is part of a research series sponsored by Investors Group and conducted by Decima Research that looks at families and money.
The research shows that while the vast majority of parents worked diligently to teach their children about money, many have not had a family discussion about the real issues of family finance and estate planning as their children have grown older. Only 27 per cent of adult Canadians whose parents are still living have met with their parents and siblings to discuss the family estate despite the fact that many respondents recognized that taxes and competing family interests could affect whether they receive a good share of what their parents wish to pass on. The danger is that the failure to talk about these issues can result in unpleasant surprises and sow the seeds of long term resentment among family members.
Adult children and aging parents find it difficult to talk about money
The research shows over 90 per cent of Canadians say they were well taught by their parents how to handle money, but nearly half -- 43 per cent -- admit they haven't had a meeting with their parents to discuss funeral plans. As well, 47 per cent have not discussed the passing of a legacy to children or grandchildren with their parents.
"Open lines of communication are as fundamental to financial planning as pie charts and calculators," says Debbie Ammeter, Vice President of Advanced Financial Planning at Investors Group. "The importance of communication to financial planning can only be taught by example and the research shows this isn't happening."
When discussions about the various elements of estate planning do happen, they can be difficult. Nearly 1 in 3 said they had difficulty discussing estate plans with their parents and 1 in 10 said the discussion was very difficult.
"People shy away from the difficult topics of death and money until they feel some urgency to have those discussions, typically when their parents are much older," says Ammeter. "Funeral plans may best represent the challenges when these two topics come together. The potential for regret and hard feelings is greatly increased if aging parents and their children don't take the time to discuss estate planning issues."
The majority of Canadians - 60 per cent -- believe they will inherit some money from their parents and 41 per cent believe it will form some part of their retirement savings. However, approximately 1 in 10 believe poor estate planning is a threat to receiving a reasonable share of their parents' estate.
Only open dialogue can help assuage inheritance concerns and issues
When asked to identify the greatest threats to their inheritances, the two issues most identified by Canadians were government taxes (42 per cent) and competing family rivalries (17 per cent).
"The best way to alleviate the threats Canadians identify to their inheritances is through the honest and open communication that occurs during a family meeting," says Ammeter. "Dialogue among family is the best way to reduce hostilities and to make certain long-term resentment doesn't result. It is also the best way to ensure an effective estate plan is in place to alleviate the tax burden."
The research revealed that 3 out of 4 Canadians have not participated in a meeting with their parents and siblings to discuss the parents' will.
Parents need to work on discussing money with kids
Parents today are optimistic for their children's financial futures, but may not be doing much better than their aging parents did at holding full family discussions about finances.
While 59 per cent of Canadians say they do a better job of discussing financial matters with their family than their parents did, only 22 per cent say big financial decisions are discussed as a family. As well, a quarter say they have not talked about family finances with their eldest child and 29 per cent of those (who haven't yet discussed) say they never will.
Will future generations fair better? Parents today believe so: 89 per cent of Canadians with kids say they try to teach their children to be careful with their money and 93 per cent are confident their children can and will be able to handle their own finances.
Three tips for improving communication about money with aging parents:
- Identify a non-threatening way to begin discussing issues related to estate planning.
- Ensure the broadest group possible is included in the discussions so that no one feels excluded.
- Consider having a financial planner chair a meeting to help keep the conversation more professional and less emotional.
The survey results are based on a national telephone survey by Decima Research conducted with a representative sample of 1000 Canadians (18 years and older) between May 19th and 22nd, 2005. A sample of this size will provide results that can be considered accurate for the population overall to within plus or minus 3.1 per cent, 19 times out of 20.
Investors Group is a national leader in delivering personalized financial solutions to more than one million Canadians, through a network of close to 3,200 Consultants located in 100 Financial Planning Centres. In addition to an exclusive family of mutual funds, managed asset and other investment vehicles, Investors Group offers a wide range of mortgage, insurance, brokerage and banking services. Investors Group is part of IGM Financial Inc. and a member of the Power Financial Corporation group of companies.
| For more information contact: | |
|---|---|
| Ron Arnst Media Relations (204) 956-3364 ron.arnst@investorsgroup.com |
Mike Van Soelen Environics Communications (416) 969-2717 mvansoelen@environicspr.com |
