Finance their children’s studies, help them with a down payment for their first property or even pay for a vacation for the whole family… Some parents prefer to leave a legacy to their children during their lifetime – in order to help them when they need it most or simply to create memories together. But be careful of being too generous: you still have to respect your financial limits so as not to put your retirement at risk.
“What is an inheritance? An inheritance is transmission. And we don’t just transfer money. We transmit values, lessons, memories…” says Claude Constant, 72 years old.
Every summer, this retired public servant gives $1,000 to each of his five grandchildren to pay for summer camps. “My paycheck is that on the Friday of the end of the riding week, I bought my granddaughter a sweater with a horse on it, and now she wears it 52 weeks a year,” says he rejoices.
When Claude Constant and his partner had finished repaying the mortgage loan on their house, the couple sought the advice of a financial advisor.
“I had about $900 a month that I used to pay and no longer needed. I asked my advisor if I should give each of my children $300 per month, which she advised me against doing. It would have created a kind of dependence… She instead recommended that I help my children occasionally as needed. »
As with his grandchildren, Claude Constant wants as much as possible to remain fair with his three daughters. “Last year, one of my daughters and I went to Haute-Mauricie. We rented a chalet. We did the same thing for a fishing trip. And since I hadn’t taken a trip with my third daughter, I helped her financially during the teachers’ strike last fall,” he explains.
Help with a down payment
Joseph Cavalancia is a 66-year-old retired accountant. His parents paid for his and his sister’s education. This son of an Italian immigrant and a Quebec mother then himself financed the studies of his three children, aged 30 to 38. “My wife and I have always said to each other that we would rather our children say thank you while we are alive than after we die,” he says.
Mr. Cavalancia also helped them buy property. “I see myself at their age and I say to myself that I would have liked to have had help back then to buy a house. But my parents didn’t have much money. »
About seven years ago, before the real estate fever of the pandemic, Mr. Cavalancia offered each of his two eldest daughters “a significant sum” of $100,000 for their down payments. The youngest son will also be entitled to assistance, somewhat “adjusted for inflation”, when he wishes to become a homeowner.
Financial assistance from friends and family for the purchase of a property is an increasingly widespread phenomenon, according to the most recent survey of mortgage borrowers by the Canada Mortgage and Housing Corporation (CMHC).
In 2022, approximately 14% of Quebec buyers had received a donation from those around them to help them finance their down payment for the purchase of a property. Two years later, this rate has almost doubled. In 2024, approximately 27% of buyers received a gift for their down payment.
Julie Guay, financial planner, is witness to this trend. “In recent years, with the rise in real estate prices and the difficulty of accessing property, we see more and more parents who want to help their children while they are alive,” she notes.
According to his observations, the amount of the donation made by parents for the purchase of a property generally ranges between $25,000 and $50,000. According to CMHC data for this year, the average amount of this type of donation is approximately $49,200 in Quebec.
Pay attention to your retirement
The level of the amount offered from one family to another “is very variable” and “depends on the capacity of each family,” notes Mylène Lapointe, also a financial planner.
“The most important advice I can give for parents who are going to give money to their children is to integrate it into their retirement plan to see the impact it will have on their own financial capacity », she adds.
Julie Guay confirms. “Wanting to help your child is very generous, but the first question parents must ask themselves is: do they really have the means to make a gift to their children during their lifetime? », she concludes.