IG Wealth Management Annual Estate Planning Study: Critical Gaps Exist in Canadians' Knowledge

Less than half of Canadians are familiar with several components of estate
planning such as powers of attorney, wills, insurance and tax implications

WINNIPEG, MB, May 29, 2024 /CNW/ - According to IG Wealth Management's (IG) annual estate planning study, the majority of Canadians are not familiar with many of the key components needed for a comprehensive estate plan. The results are concerning given the increased importance of estate planning due to Canada's aging population.  

The study, conducted in partnership with Pollara Strategic Insights, found that just 46 per cent of adult Canadians report having general knowledge about estate plans. When asked further, less than half are familiar with many key features:

• just 50 per cent are aware of how a power of attorney works;
• forty-seven per cent understand the role a will plays;
• only 37 per cent are familiar with how taxes impact assets after death; and
• forty-five per cent appreciate the important role life insurance can play in protecting the value of one's estate. 

Further, the study found that only one-third of Canadians have an estate plan in place (up from 25 per cent a year ago).

"While it's encouraging that there's been an increase in the number of Canadians who report having an estate plan, it's still quite low," said Christine Van Cauwenberghe, Head of Financial Planning, IG Wealth Management. "It's also concerning that a majority of us are unfamiliar with so many of the critical pieces that make one up. It's important because eventually we'll all have to deal with estate planning directly as we age or through a parent or elderly relative."

Ms. Van Cauwenberghe noted that a properly constructed estate plan allows for the distribution of assets according to an individual's wishes, in a tax-efficient manner. 

"Take, for example, life insurance. Not only does it play an important role in helping provide financial security for one's family in the event of death, it can also help offset the associated costs of a wealth transfer, including probate fees and taxation, to ensure the next generation receives an inheritance amount from the estate as intended. The reality is that passing down assets, like a family cottage, can often result in a significant tax burden. Life insurance payouts, which are tax-exempt, can help offset these costs and allow the property to remain in the family."

The Role of the Financial Advisor  

The study also uncovered that, of those who work with a financial advisor, just half (52 per cent) have had conversations with their advisor about the need for an estate plan.

"You should expect more from your advisor and only work with one who not only understands how a comprehensive estate plan can safeguard your assets for the long-term, but who also has the experience and foresight to build one out," concluded Ms. Van Cauwenberghe.

About the Pollara Study

This study was conducted with an online sample of 1,000 adult Canadians aged 18 years and above.  This research was conducted from April 30th to May 3rd, 2024. Results from a random sample of this size can be considered accurate to within ±3.1%. 19 times out of 20.

About IG Wealth Management

Founded in 1926, IG Wealth Management is a national leader in delivering personalized financial solutions to Canadians through a network of advisors located across Canada. IG Wealth Management has $125.7 billion in assets under advisement as of April 30, 2024, and is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial, together with its subsidiaries, is one of Canada's leading diversified wealth and asset management companies with approximately $247 billion in total assets under management and advisement as of April 30, 2024.

SOURCE IG Wealth Management