Estate planning is more crucial than ever, especially as Canada's population ages. Akua Carmichael, a seasoned estate lawyer and frequent speaker, specializes in customized estate planning and administration solutions, with expertise in wills, trusts, and intergenerational planning. In Outlook 2025 she provided insights on demographic shifts, the increasing life expectancy of Canadians, and the lack of preparedness when it comes to estate planning. Below are the key takeaways from the discussion:
1. The Reality of an Aging Population
- Baby boomers are getting older, with the youngest reaching 65 and the oldest turning 85 by 2031.
- Statistics Canada projects that by 2031, one in five Canadians will be 65 or older.
- Baby boomers hold significant wealth, leading to an ongoing intergenerational wealth transfer estimated at $1 trillion.
- Business succession planning is a pressing issue, as many aging business owners need to transfer their businesses effectively.
2. Canadians Are Living Longer
- The average life expectancy in Canada is 83 years and continues to rise.
- There are currently around 12,000 Canadians over the age of 100, a number that surprises many.
- Living longer brings new challenges, particularly in healthcare and financial planning.
3. Lack of Estate Planning Among Canadians
- Many Canadians are unprepared for aging and estate planning.
- A 2022 Ipsos survey found that only 48% of Canadians had a will, with an increase to 50% in 2023 according to Angus Reid.
- Even among Canadians 55 and older, only 44% reported having a comprehensive estate plan.
- Less than 30% of all Canadians have a complete estate plan, which includes wills, powers of attorney, trusts, insurance, and healthcare directives.
4. The Importance of Planning for Incapacity
- Estate planning is not just about distributing assets but also ensuring decision-making ability in later years.
- Dementia cases in Canada are projected to increase by 65% by 2030, affecting nearly one million people.
- Planning for incapacity, including appointing power of attorney and making healthcare directives, is essential for individuals and their families.
Conclusion
Canadians are living longer and holding more wealth than ever before, making estate planning a critical issue. While many acknowledge the need to plan, statistics show that a significant portion of the population remains unprepared. Taking proactive steps—such as creating a will, appointing powers of attorney, and considering long-term care needs—can help individuals secure their financial legacy and ease the burden on their loved ones.
For those who have yet to put an estate plan in place, now is the time to start.