A new survey conducted by Ipsos for RBC Insurance has found that Canadians want to maximize what they leave behind when they die, but there is an awareness gap preventing the use of financial products and services that can help.
Of the 1,501 Canadians surveyed in March 2023, 87 per cent say they want to avoid unnecessary estate fees, while 86 per cent say they want to minimize out-of-pocket settlement costs needed to settle their affairs.
“However, the findings also suggest there is a lack of planning and prioritization among Canadians when it comes to preparing their estate,” the bank’s insurance division states, adding that estate plans are important, but many don’t have a clear understanding about what happens to their money after they die.
Of those surveyed, 61 per cent don’t feel knowledgeable about or have never heard of the probate process. Notably, 57 per cent aren’t aware that estate taxes may be reduced by insurance policy benefits, an awareness gap they say makes it more difficult for Canadians to set up their estates advantageously. “For example, only 25 per cent say they are knowledgeable about segregated funds, an investment solution that can help maximize an inheritance by reducing estate fees, since the funds bypass probate and are paid directly to an appropriate named beneficiary,” they write.
Among the barriers examined, they say 42 per cent over age 55 are not talking openly about their long-term wishes; 38 per cent say their financial affairs are private and they don’t feel comfortable discussing them with loved ones. Another 21 per cent said that speaking with family about their financial affairs will cause infighting. Furthermore, 34 per cent, more than one-third, say their spouse or partner is not familiar with their estate plans. More than half add that their financial planner is also not in the loop.
