Less than half of Canadians are familiar with
several components of estate
planning such as powers of
attorney, wills, insurance and tax implications
WINNIPEG, MB, May 29, 2024
/CNW/ - According to IG Wealth Management's (IG) annual estate
planning study, the majority of Canadians are not familiar with
many of the key components needed for a comprehensive estate plan.
The results are concerning given the increased importance of estate
planning due to Canada's aging
population.
The study, conducted in partnership with Pollara Strategic
Insights, found that just 46 per cent of adult Canadians report
having general knowledge about estate plans. When asked further,
less than half are familiar with many key features:
- just 50 per cent are aware of how a power of attorney
works;
- forty-seven per cent understand the role a will plays;
- only 37 per cent are familiar with how taxes impact assets
after death; and
- forty-five per cent appreciate the important role life
insurance can play in protecting the value of one's
estate.
Further, the study found that only one-third of Canadians have
an estate plan in place (up from 25 per cent a year ago).
"While it's encouraging that there's been an increase in the
number of Canadians who report having an estate plan, it's still
quite low," said Christine Van
Cauwenberghe, Head of Financial Planning, IG Wealth
Management. "It's also concerning that a majority of us are
unfamiliar with so many of the critical pieces that make one up.
It's important because eventually we'll all have to deal with
estate planning directly as we age or through a parent or elderly
relative."
Ms. Van Cauwenberghe noted that a
properly constructed estate plan allows for the distribution of
assets according to an individual's wishes, in a tax-efficient
manner.
"Take, for example, life insurance. Not only does it play an
important role in helping provide financial security for one's
family in the event of death, it can also help offset the
associated costs of a wealth transfer, including probate fees and
taxation, to ensure the next generation receives an inheritance
amount from the estate as intended. The reality is that passing
down assets, like a family cottage, can often result in a
significant tax burden. Life insurance payouts, which are
tax-exempt, can help offset these costs and allow the property to
remain in the family."
The Role of the Financial Advisor
The study also uncovered that, of those who work with a
financial advisor, just half (52 per cent) have had conversations
with their advisor about the need for an estate plan.
"You should expect more from your advisor and only work with one
who not only understands how a comprehensive estate plan can
safeguard your assets for the long-term, but who also has the
experience and foresight to build one out," concluded Ms.
Van Cauwenberghe.
About the Pollara Study
This study was conducted with an online sample of 1,000 adult
Canadians aged 18 years and above. This research was
conducted from April 30th to May 3rd,
2024. Results from a random sample of this size can be
considered accurate to within ±3.1%. 19 times out of 20.
About IG Wealth Management
Founded in 1926, IG Wealth Management is a national leader in
delivering personalized financial solutions to Canadians through a
network of advisors located across Canada. IG Wealth Management has $125.7 billion in assets under advisement as of
April 30, 2024, and is a member of
the IGM Financial Inc. (TSX: IGM) group of companies. IGM
Financial, together with its subsidiaries, is one of Canada's leading diversified wealth and asset
management companies with approximately $247
billion in total assets under management and advisement as
of April 30, 2024.
SOURCE IG Wealth Management