We are about to embark on the greatest wealth transfer in history. It may not be just an inheritance you will be receiving but rather the involvement in a lengthy legal action.
Each year in Canada billions of dollars in assets are transferred upon death. Numerous studies have attempted to quantify the magnitude of wealth that is to be distributed from one generation to the next. It has been estimated that Boomers may be looking to inherit approximately $1 trillion over the next twenty years.
Throughout history, family and friends have often fought over money. However, lawyers are noting that there has been a marked increase in litigation over estates.
It is not just the fact that tremendous wealth is being transferred from generation to generation; it is the fact that these transfers are taking place in a time where we have numerous second and third marriages and step children.
In Canada, approximately 40% of marriages end in divorce. Close to 75% of men and 65% of women remarry. Divorce rates for successive marriages are even greater. These statistics do not even take into consideration the growing number of individuals who enter into common law relationships.
As a result, many individuals who die now have two spouses, children from each marriage or relationship and step children.
Needless to say, these new family realities are ripe for conflict. Death, wealth transfer and “extended family” discord results in increased estate litigation. All of these players have varying degrees of attachment and empathy for each other. As a result, more and more of these individuals are seeking the advice of lawyers upon the death of an individual to determine their claims and entitlements. Challenges to wills and support claims are becoming much more common. Given the dollar amounts involved in the transfers from generation to generation and the sufficient funds available, more and more people are willing to take on these battles.
This therefore begs each of us to have our affairs in order to limit the possibility of our wills and estates becoming highly litigious matters.
What steps can you take to minimize the risk of estate conflict in your family? The subject of my next blog…