BMO: More communication is needed in estate planning

More than half (53 percent) of Canadians say the most serious drawback for families that do not having estate planning conversations is the potential for conflict between surviving family members after the death of a loved one, according to a new report.

BMO Wealth Institute, a unit of BMO Financial Group, discloses this finding in “What are you leaving behind: Family conflict or a memorable legacy.”

The study reveals that more than 90 percent of Canadians over age 65 have a will, but only 53 percent of all Canadians have a will. The table below shows a strong correlation between a person’s age and the likelihood that he or she will have a will:

“Traditionally, estate planning focused on estate administration, tax considerations and having the proper legal documents in place,” the report states. “[But] the emotional impact on those left behind calls for the introduction of a broader concept of estate planning. Enhanced estate planning requires having detailed conversations to share the background and reasoning behind the estate decisions that have been made and that…heirs will have to implement.”

More than 80 percent of Canadians with a son or daughter at least 40 years of age have had at least one conversation with them about their legacy goals and estate plans. However, only about one-third of these conversations are “detailed.”

Among adult children whose parents are age 60 or older, the study adds, more than six in 10 have had at least one conversation with their parent. But only 22 percent can be considered detailed.

Among the reasons that families have not had detailed estate planning conversations, survey respondents answer the following:

Estate planning is too complex (3 percent)