This article from the CBC (http://www.cbc.ca/news/business/high-consumer-debt-reflects-laissez-faire-attitude-to-borrowing-1.2988768) and others discuss the growing debt burden on Canadians. They make allowances for the fact that house prices are insane, and interest rates are also historically low, and that despite the slump in the oil sector a lot of Canadians do not feel that the economy is too bad, but the pundits still feel their is a need to worry.
Then there are other articles about the transfer of wealth, and in the case of the Maclean's article, the battles that can come with that transfer (http://www.macleans.ca/society/life/the-inheritance-wars/).
So, how much of the transfer will offset the debt? And an insufficiently covered part, until I read the Maclean's piece, was how much will the lawyers get.
There are several battles waging for the money that might be transferred. The longevity and health of the people currently holding the wealth: they may be healthy enough to spend it travelling, or need more expensive medical care. The amount that their children might have needed during the much rockier times since the 70s with more schooling, poor job markets and now, high costs of housing. Then of course there is also the philosophical position of those holding the wealth. In 2013 this article came out (http://www.businessinsider.com/tycoons-not-leaving-money-to-their-kids-2013-8?op=1) and while being taken care of by billionaire parents might be more than most would get, it is still not what the rest of us thought might happen. I also know middle class families that hold the same views, that children need to make their own way and should not rely on their parents to get ahead.
I think I lie somewhere in the middle. The world is a tough place and while I think children, young or grown, need to be able to fend for themselves and build a future and not depend on what may be left to them, I think some help is OK. Some might want to build a dynasty, or grow family wealth and set things up so that whatever you are given by your parents you must give each of your children at least that amount. If this were the case then someone must double, or triple their net worth to keep those standards if they have children. Is this done through a Trust? How can you hold people to this? I think the key thing is raising your children with the values you really want them to have, and giving them too much will definitely lead to zero motivation to succeed on their own. So what this help looks like will be different for every family, but what I can say is whatever your plans make sure you get them down on paper and make sure they cover all eventualities.
Do not forget you, or a family member, may get dementia and you should know that, in Ontario anyway, the laws are against the family in the case of a single adult with dementia. Why do I say this? If you think children can be nasty fighting over their inheritance just think about what could happen if a nice man, or woman, saw your single mother, or father, with dementia and a tidy nest egg. Maybe the Will was in place before your parent got dementia, and maybe mom, or dad cannot legally sign a contract to buy a car, but they can get married, and in Ontario at least, if they get married that Will they wrote back when they knew what they wanted, becomes NULL & VOID, and then when they die, well, I guess the lawyers could get most of it, but it certainly will not shake out the way it was planned. (In case you want to read more check out this book, it is well worth the investment if you, or your parents have any net worth that might be targeted. http://www.carswell.com/product-detail/capacity-to-marry-and-the-estate-plan/ and/or listen to the following broadcast http://podcast.cbc.ca/mp3/podcasts/ontariotoday_20150115_54711.mp3 ).
I could go on, but my belief is that we are not going to see debt ratios getting any better while interest rates are so low and housing prices remain so high. I also think despite articles warning that there may be less than one planned when parents die, and it may come later, people are still going to pretend they will rely on their inheritance to get them through their own retirement. This kind of wishful planning is not the best path so whatever your beliefs, or plans, make sure you have the paperwork and budgets in line to meet your own, and your family's goals.
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