A recent study commissioned by HomEquity Bank, provider of the CHIP reverse mortgage, shows 45 per cent of Canadians surveyed are not expecting an inheritance from their parents, compared to 35 per cent who do expect to receive a financial bequest. Twenty per cent of respondents don't know if they will receive an inheritance.
Nearly all respondents (94 per cent) who expect to receive an inheritance say they are willing to give up half their inheritance to maintain or improve their parents' lifestyle, compared to just six per cent who would not be willing to do this.
These are the findings of an Ipsos Reid survey, where 1,025 Canadians were interviewed on the topic this spring.
With a reverse mortgage, parents can often be worried about tapping into the
equity in their home and potentially depleting the inheritance. However, the survey shows adult children don't seem to mind.
"We do sometimes see examples of entitlement, but they're definitely in the minority," explained Yvonne Ziomecki of HomEquity Bank. "We often find adult children aged 45-plus are very focused on what's best for their parents and they are very willing to forgo half their inheritance to improve their parents' lifestyle.
"In some instances funds are required to make improvements to the house or pay for in-home medical care. Adult children of seniors often have their own expenses of paying off the mortgage, putting their kids through school, vacations, etc. Having to support two households can put a lot of strain on the family as a whole."
According to the Ipsos Reid survey, younger Canadians aged 18 to 34 are most likely to expect to receive an inheritance (39 per cent).
Among those expecting an inheritance, women (96 per cent) are slightly more likely than men (92 per cent) to be willing to give up half their inheritance to maintain or improve their parents' lifestyle.
A reverse mortgage allows homeowners to access money as a one-time lump sum, as monthly payments or both.
Unlike a traditional loan, no payments are necessary until it's time to sell the home.
"The majority of our clients still leave an inheritance to their children," said. Ziomecki. "In most cases at the time of sale our clients have an average of 50 per cent of the equity left in their homes."
