This 70 year old retiree counted on an inheritance that never came. What her story teaches about financial security

“Nadine”, a 70-year old retired social worker, had been taking care of her aging mother for years, and her mother’s other children when necessary. As a single, unmarried, childless resident of the East Coast, Nadine planned her future around a potential inheritance from her mother, which seemed reasonable given how much of her time and energy she spent caring for her. It made sense, that is, until she was abruptly cut out of her mother’s will.

The Globe and Mail reported that Nadine had expected to receive a quarter of her mother’s estate, worth approximately $500,000 (1). Instead, her mother pulled away, no longer allowing Nadine to care for her, moving to a new apartment, dissolving her current will and her current estate plan — leaving Nadine out of the picture.

“I think she’s worried her children will fight and contest her will. And, just to make sure it happens her way, she’s giving all the money away instead,” Nadine told the outlet.

Nadine learned through the difficult circumstance that relying on an inheritance can create financial complications, and leave her with profound feelings of unfairness.

Many Canadians expecting familial windfalls, perhaps unwisely

Nadine isn’t the only Canadian expecting to receive a large inheritance from their parents. A survey from Sun Life (2) indicated that Millenials are expecting a windfall of around $300,000 from family members, whereas members of the Boomer generation who are giving 100% of their wealth to their children are expecting to leave behind $900,000+.

A separate survey from the Carrick on Money Newsletter (3) found that 81% of the 1,600+ Canadians surveyed were expecting an inheritance from their parents, further confirming that the current generation is priming themselves for a massive wealth transfer.

But, relying on a major windfall later in life can be an unwise move. For starters, timelines can change. More people are living well into old age, Statistics Canada notes in recent research (4), and the timing of an inheritance payout can make or break your financial situation if you’re swimming in debt.

Moreover, a lot can change between the creation of an estate plan and when parents pass away. Like Nadine’s story shows, a parent’s estate plan is largely out of their children' s control — even if they are the proposed personal representative at the time.

Sponsored

Smart investing starts here

Build your own investment portfolio with CIBC Investor’s Edge online and mobile trading platform. Enjoy low commissions on trades and special pricing for active traders, students and young investors.

Get started today

What to do if you’re left out of a will

If you find yourself cut out of an inheritance plan like Nadine, your options aren’t exactly simple.

If the loved one is still alive and you hear about the decision early on, keep lines of communication open and discuss the reasoning that went into their choice. It’s important you know what their plans are ahead of time so you can prepare. But, don’t make the conversation about you. RBC (5) recommends approaching the topic from the perspective of your parents — not from what you have to gain.

If your loved ones have passed and you’re just finding out you’ve been removed from the will, you do have the option to contest their will. But, according to Canadian Lawyer Mag (6), you’ll need to prove at least one of a number of complex facts (e.g. the will was forged) in a court of law — a process that is time-consuming and expensive.

How to manage your finances after an inheritance falls through

Getting cut out of a will can be extremely painful and create a massive amount of financial insecurity. Here are some ways you can manage your finances after a family member’s windfall blows the other way.

• Reassess your financial plan. If you were planning on receiving a large sum of money, you likely made decisions around that windfall coming. One of the first things to do is revise your financial plan and budget to match the new situation.
• Explore ways to expand your income. Replacing a cancelled inheritance with a new side gig, a raise or taking on overtime hours at work can help you get on your feet faster — especially if you invest that money wisely.
• Prioritize high-interest debt. In some cases, you might’ve been hoping for an inheritance to pay off a mortgage or looming consumer debt. Though your financial picture has changed, continue to focus your efforts on repaying any high-interest debt you have accrued.

Sponsored

Take control of your money with Monarch

Simplify your finances with Monarch, the all-in-one app designed to help you budget, track spending, and hit your goals faster. For a limited time, get 50% off your first year with code WISE50.

Start your free trial today

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Globe & Mail (1); Sun Life (2); Globe & Mail (3); StatCan (4); RBC (5); Canadian Lawyer Mag (6)