Millennials looking to strike it rich from inheritance may need a reality check, according to a new Vancity report released on Monday.
It’s not that they’ll end up with nothing but they will need to adjust their unrealistic expectations when it comes to the bank of ‘Mom and Dad’.
The report, which looked at inter-generational wealth in B.C., found more than 39 per cent of Metro Vancouver children expect to get an inheritance of more than $300,000; while only 12 per cent of parents anticipate leaving a legacy over that amount.
Instead the credit union’s research found that over 60 per cent of parents expect to leave their children $100,000 or less.
“I think part of what’s happening is that over 60 per cent of parents are already passing along money now,” explains Vancity investment advisor Sophie Salcito.
“They want to do it while they’re alive and they’re helping pay off debts, which is the number one use and helping to pay for down payments. So the money is flowing a little bit earlier and people are living longer.”
The baby boomer generation still account for 40 per cent of consumer expenditures. They’re still spending and planning things like travel; which can mean there’s potentially not as much left in the coffers after their deaths.
According to the report, the median asset value of B.C. households 64 years and older, is just under $595,000 with the average inheritance in the province in 2012 at $137,800, while the median was only $50,200.
That $50,000 is a far cry from the expected $300,000 by millennials.
A way to avoid any surprises, Salicto says, is having a conversation with family members about wealth and inheritance.
“It can be difficult for parents to talk their kids about their death, the state of their finances or any potential inheritances,” Salicto says.
“But these are important conversations, especially if children have unrealistic expectations or aren’t taking responsibility for their own financial future.”