Wealthy to leave 30% of estates to children

Wealthy investors (those with more than $1 million in investible assets) plan on leaving about a third of their money to their children, says a new BMO study.

Then, they’ll divide the rest as follows:

• Spouse or partner (60%)
• Other family members (4%)
• Charities (3%)
• A board or company (3%)

Read: 5 steps to estate success

Most of those polled (80%) say their children are ready to manage inherited wealth. That’s largely because more than half (65%) have spent time educating their children about money management.

Parents don’t have “ability to guarantee bull markets and a strong overall economy for [their] children, [but they can]…teach [them] about personal finance issues,” says Yannick Archambault, vice president and COO of BMO Harris Private Banking. “The earlier a family is committed to educating the next generation, the better off they will be when the transfer of wealth occurs.”

Read: Low financial literacy plagues Millenials

Still, only about a quarter (26%) of wealthy Canadians say their children will be more financially successful than they’ve been. Almost half (41%) say their kids will be worse off, with 60% blaming the economy.

American parents are more optimistic, says the study, since nearly half (43%) predict their children will amass more wealth. Only 35% say their kids will be worse off.

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