Contested wills expected to become more common
Disputes about wills and inheritances may be set to grow dramatically in the coming years. According to CBC News, a confluence of various factors is setting the stage for an increase in contested wills over the next two decades. With the savings of those born in the 1930s and 1940s set to be transferred to their Baby Boomer children, analysts say expectations on the part of potential heirs could soon lead to bitter family disputes. Additionally, rising personal debt levels and growing property prices have made inheritances a more important and contested issue for many families.
Transfer of wealth
Perhaps the main reason why inheritance disputes are expected to increase is simply because of the amount of wealth that is at stake. Approximately one trillion dollars is expected to be transferred from people who were born in the 1930s and ’40s primarily to their Baby Boomer children over the next couple decades. That amount will make it the largest such transfer of wealth in Canadian history.
Additionally, other factors are also contributing to even larger estates being transferred than many people had anticipated. Rising property values, for example, mean that people who have owned homes in major urban centres, such as Vancouver, for decades are now finding themselves in possession of real estate worth many times more than the original value.
At the same time, however, Baby Boomers should be careful about their expectations. As Maclean’s notes, much of the wealth that is to be inherited in the coming decades is concentrated in the top 17 percent of affluent seniors. For most Canadians, the average inheritance will be about $100,000, although that figure itself is subject to large variations depending on location and individual family circumstances.
Furthermore, while those who were born during the Great Depression and World War II typically have a large amount of savings, Baby Boomers are in notably worse financial straits. The average liquid assets of Canadian Baby Boomers is just over $252,000 per household, in comparison to the more than $440,000 per household for Canadians over 65. Baby Boomers are also more in debt than their parents and close to half of all Baby Boomers say they have saved less than $100,000 for their retirements. The contrast between the financial circumstances of Baby Boomers and their parents could mean that a growing number of disputes could arise due to many Baby Boomers relying on an inheritance to see them through retirement.
Wills and estates
Deciding whether or not to contest a will can be a difficult decision. Even when the validity of a will is in doubt – such as in cases where elder abuse or undue influence may have occurred – many people are reluctant to challenge a will in court. However, challenging a will may ultimately be the only way to ensure that a deceased loved one’s final wishes are adhered to. A wills and estates lawyer can assist families who have concerns about a will’s validity and guide them through what legal options may be available.