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Lasting Legacy:

Insights into Giving and Inheriting Wealth Across Generations

It’s estimated that within a generation, $4 trillion US will be passed down to inheritors in Canada, the United Kingdom and the United States. Yet wealth rarely endures long enough to create a legacy that lasts for multiple generations.

 

With that in mind, RBC undertook a study to find out how prepared families are to give and receive inheritances. RBC surveyed 3,105 individuals in Canada, the UK and the US, and supplemented our data with in-depth interviews. The respondents – worth $4.5 million US on average – included wealthy professionals and entrepreneurs, business owners and retirees, givers and inheritors of wealth.

 

What RBC found was a remarkable gap between intention and action, resulting in a general lack of preparedness.  The research shows that individuals have every intention of transferring their knowledge to the next generation.  However, it turns out that many families are repeating the cycle of inadequate financial guidance, delivering too little too late.  RBC found that on average, structured financial education is only beginning at age 27.

 

RBC also observed that people are uncomfortable talking about inheritance, and when they do, their conversations are limited in scope: almost three-quarters of high net worth inheritors who have had advance conversations with benefactors know the monetary value of what they will receive, yet only one- third of them know how their benefactors want them to use that wealth. Additionally, only one-fifth of inheritors who talked to their benefactors received guidance on the various options used to transfer wealth.

 

How people pass on their wealth to the next generation impacts whether a family legacy will last for a single generation or well beyond.  It also has broader economic and societal implications.  If the current generation is able to transfer its knowledge as well as its wealth effectively, it could increase the likelihood that future generations will be better prepared to preserve wealth, drive economic growth and give back to their communities.

 

The act of passing on one’s wealth is about much more than wealth preservation; it’s about creating meaningful legacies that reflect one’s values.  

 

The 29-page study entitled, “Wealth Transfer Report 2017”, provides valuable insights into the very real challenges and significant opportunities of wealth transfer across the generations.

 

Given the limited space in this article, a full overview of the report is impractical. However, feel free to contact me for an e-mailed copy of the report, at susan.gottlieb@rbc.com.

 

Susan Gottlieb is Vice President and Wealth Advisor with RBC Dominion Securities Inc. This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article.

 

The strategies, advice and technical content presented is provided for the general guidance and benefit of our clients, based on information that we believe to be accurate, but we cannot guarantee its accuracy or completeness. This presentation is not intended as nor does it constitute legal or tax advice. Clients should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. This will ensure that their own circumstances have been considered properly and that action is taken on the latest available information. Interest rates, market conditions, tax rules, and other investment factors are subject to change. Insurance products are offered through RBC Wealth Management Financial Services Inc. (“RBC WM FS”), a subsidiary of RBC Dominion Securities Inc. RBC WM FS is licensed as a financial services firm in the province of Quebec. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. * Member – Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ® Registered Trademark of Royal Bank of Canada. Used under license. © 2014 Royal Bank of Canada. All rights reserved.