“The topic of inheritance is an important issue that requires communication to help the next generation succeed in handling new-found wealth,” says Sam Febbraro, Executive Vice President of Investment Planning Counsel. “Children need to understand their parents’ financial objectives for the money that they are leaving behind so they can continue their legacy.”

Toronto-based research firm Strategic Insight projects that approximately $1 trillion in personal wealth will be transferred from one generation to the next in Canada between 2016 and 2026, with roughly 70 percent of that in the form of financial assets.

Amid this vast amount of wealth that will be handed over, 32 percent of affluent Canadians say they are worried about how their heirs will handle their inheritance; and 36 percent say their children don’t have the financial literacy to manage a potential windfall.

Yet, the data revealed that only one in five (19 percent) say they have introduced their children to a financial advisor or have taken them to a planning meeting with the person currently managing their money (18 percent).

“It’s important to have that financial planning conversation between family members when parents are still healthy, and everyone is calm, as opposed to making decisions in a time of crisis when emotions are high,” says Febbraro.

Blended families

The poll revealed that those who are part of a blended family—which includes children of a previous marriage of one or both spouses—are more likely to indicate a lack of trust in their beneficiaries’ ability to manage their wealth (28 percent).

They also share a range of other concerns, such as whom to appoint as the primary beneficiary (15 percent), how to fairly divide assets (13 percent), and the fact that they haven’t spoken openly to their spouse about their estate plans (13 percent). Almost 20 percent of the 400 surveyed were part of blended families.

“There is an opportunity for financial advisors to start that dialogue with their clients on inheritance planning and help educate the next generation on how to steward their finances,” says Paul Wylie, Senior Vice President of Business Development at IPC Private Wealth. “Advisors can play a quarterback role and help clients overcome their fears over their heirs’ ability to manage their wealth.”

Other key findings in the IPC Private Wealth poll include: