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Posthaste: Baby boomers expect to leave $1 million or more to their kids — much to millennials' surprise Back to video

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Millennials could be in for a shock when their baby boomer parents pass on their wealth, with many in for a much bigger inheritance than they ever dreamed.

Baby boomers who plan to pass on all their assets to their millennial children expect to leave an average inheritance of $940,000, according to a survey from Sun Life Financial Inc., conducted by Ipsos. That figure is even higher among those working with a financial adviser, the survey said, with those boomers expected to leave just over $1 million to their children.

Yet millennials don’t appear prepared for the windfall they are about to inherit. Most expect an average inheritance of only $309,000 — a far cry from the close to $1 million or more they could be in for. Such a large sum has the potential to introduce a host of complications to millennials financial lives if they don’t plan ahead, Sun Life said.

Canada has never experienced so much wealth passed between generations, with Canadians expected to leave as much as $1 trillion in inheritances by the end of 2026, research shows.

“We are experiencing the largest intergenerational wealth transfer in Canada’s history,” Rowena Chan, a senior vice-president at Sun Life, said in a news release. “Canadians have a significant opportunity to secure lifetime financial security for themselves and their loved ones for future generations — and it’s never too early to start planning.”

But it appears few are taking the proper estate planning steps. Less than half of the 44 per cent of baby boomers expecting to leave an inheritance have a financial plan in place, the survey said. What’s more, just over a quarter haven’t even talked to their heirs about the inheritance they should be expecting.

Failure to plan ahead has implications for both boomers and their children, Sun Life said. For one thing, the generation passing on wealth will need to account for variables such as longer life expectancies, stock market volatility, and the higher costs of living and retirement, along with health-care costs, if they want to ensure their heirs receive the gift they intend. But millennials, too, will need a plan, especially as 57 per cent expect to use their inheritance to pad out their retirement savings.

“It’s important for boomers and millennials alike to have transparent conversations about estate planning and it pays to start early,” Brian Burlacoff, an adviser at Sun Life, said.

A rising cost of living has made such planning even more important, as many millennials appear to be relying on an inheritance to help cover soaring housing and debt bills. The survey said 55 per cent intend to put their inheritance toward higher home expenses and 36 per cent will use it to pay off debt.

“Receiving an inheritance presents a huge opportunity for millennials whose generation has faced immense economic pressure including volatile interest rates and exorbitant housing costs,” Burlacoff said.

The survey is based on responses from 750 baby boomers, aged 58 to 77, and 750 millennials, aged 27 to 42.

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Canada’s merchandise trade surplus more than doubled in September as higher oil prices helped boost energy exports, Statistics Canada said Tuesday.

The country’s trade surplus for the month amounted to $2 billion compared with a revised surplus of $949 million for August.

Total exports rose 2.7 per cent to $67.0 billion in September. The increase came as exports of energy products gained 10.6 per cent at $16.9 billion, boosted by a 13.7 per cent increase in crude oil exports that was largely due to higher prices.

On the flip side, total imports increased one per cent to $65 billion. Imports of motor vehicles and parts rose 5.8 per cent in September to $12.9 billion, while imports of industrial machinery, equipment and parts fell 3.6 per cent to $7.5 billion.

• The Bank of Canada will release its summary of deliberations for its most recent policy meeting at 1:30 p.m.
• The 2023 HardTech Summit, a hardware technology-focused event, takes place in Markham, Ont.
• Today’s data: Canadian building permits; U.S. wholesale trade
• Earnings: Indigo Books & Music Inc., The Walt Disney Co., Airbus SE, Suncor Energy Inc., TC Energy Corp., Manulife Financial Corp., Hydro One Ltd., Linamar Corp.

Get all of today’s top breaking stories as they happen with the Financial Post’s live news blog, highlighting the business headlines you need to know at a glance.

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Investors are always looking for an edge and sometimes that means looking for advice from more famous and successful investors. Financial Post columnist Peter Hodson picks some of the best quotes from Ben Graham, Warren Buffett and three others to highlight what investors should be thinking about today.

Today’s Posthaste was written by Victoria Wells, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com.

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