Is a Living Inheritance Smarter Than Leaving a House in a Will?
For decades, the most common plan was simple: stay in the family home as long as possible, and whatever is left — especially the house — passes to the children after death. But many Canadians, particularly in the boomer generation, are starting to rethink that model. Instead of leaving the house in a will, they are choosing to give part of the inheritance while they’re still alive.
That shift has less to do with tax strategy and more to do with timing, utility, and intention.
Why the Traditional “Leave the House Later” Model Is Being Questioned
There are four realistic questions aging homeowners are asking themselves:
1. Will my children even want the house?
Many adult children live in other cities, don’t want the upkeep, or will sell it immediately anyway.
2. Will the house even be useful to them by the time I die?
2. Will the house even be useful to them by the time I die?
If children are already in their 50s or 60s when they inherit, the windfall arrives long after their most financially demanding years (raising kids, buying homes, launching careers).
3. Why wait to give them something when I could help them now?
3. Why wait to give them something when I could help them now?
A down payment today may have more impact than a paid-off house decades from now.
4. Does maintaining the house cost me lifestyle I could enjoy now?
4. Does maintaining the house cost me lifestyle I could enjoy now?
Keeping a large property often delays retirement freedom for the sake of an inheritance the recipients may not actually need.
What a Living Inheritance Actually Enables
When homeowners liquidate some or all of their equity and pass money to their children while alive, it creates different outcomes:
* Children buy homes sooner, avoiding more years of high rent
* Graduates start careers without student debt
* Families reduce financial stress during their peak-cost years
* Retirees witness the impact instead of leaving it to lawyers and paperwork
Many parents say the biggest emotional benefit is this:
they get to see the gift change someone’s life, instead of hearing about it after they’re gone.
Why Some Still Prefer to Leave the House in a Will
For some families, a living inheritance doesn’t feel right — and there are valid reasons:
* The house provides emotional security and identity
* The value may still be climbing in the current market
* Parents fear outliving their money
* Family dynamics make early distribution complicated
* The home is intended for a dependent child or relative
A living inheritance is not universally better — it is simply a different philosophy about timing.
Tax and Legal Realities to Consider
While this topic is largely emotional and strategic, there are a few legal points worth noting:
What a Living Inheritance Actually Enables
When homeowners liquidate some or all of their equity and pass money to their children while alive, it creates different outcomes:
* Children buy homes sooner, avoiding more years of high rent
* Graduates start careers without student debt
* Families reduce financial stress during their peak-cost years
* Retirees witness the impact instead of leaving it to lawyers and paperwork
Many parents say the biggest emotional benefit is this:
they get to see the gift change someone’s life, instead of hearing about it after they’re gone.
Why Some Still Prefer to Leave the House in a Will
For some families, a living inheritance doesn’t feel right — and there are valid reasons:
* The house provides emotional security and identity
* The value may still be climbing in the current market
* Parents fear outliving their money
* Family dynamics make early distribution complicated
* The home is intended for a dependent child or relative
A living inheritance is not universally better — it is simply a different philosophy about timing.
Tax and Legal Realities to Consider
While this topic is largely emotional and strategic, there are a few legal points worth noting:
* There is no inheritance tax in Canada, but capital gains can apply if the property is not a primary residence
* Transferring property during life can trigger unintended taxes if done incorrectly
* Adding children to title “just to make it easier later” can create legal and CRA problems
* Cash gifts have no tax to the recipient, but can affect government benefit eligibility for the giver
This is why many retirees choose to sell the home themselves, gift funds, and retain control — rather than involve children on title prematurely.
The Psychological Divide Between the Two Strategies
Leaving a house in a will is about protecting the future.
Giving a living inheritance is about shaping the present.
One mindset asks:
“What do I want them to have when I’m gone?”
The other asks:
“What do they need most while I’m still here?”
Neither is inherently smarter. The better choice depends on family values, financial stability, and how a person wants their generosity to function in real time.
The Bottom Line
A living inheritance reflects a change in generational thinking. Instead of preserving wealth strictly for later, more retirees are choosing to deploy their equity sooner — at a stage when it can relieve pressure, change outcomes, and be experienced together.
Whether that is “smarter” depends on one question only:
Is your goal to leave something behind — or to improve lives while you’re here to see it?
Talk to your financial advisor to see what is best for you and your family.
* Transferring property during life can trigger unintended taxes if done incorrectly
* Adding children to title “just to make it easier later” can create legal and CRA problems
* Cash gifts have no tax to the recipient, but can affect government benefit eligibility for the giver
This is why many retirees choose to sell the home themselves, gift funds, and retain control — rather than involve children on title prematurely.
The Psychological Divide Between the Two Strategies
Leaving a house in a will is about protecting the future.
Giving a living inheritance is about shaping the present.
One mindset asks:
“What do I want them to have when I’m gone?”
The other asks:
“What do they need most while I’m still here?”
Neither is inherently smarter. The better choice depends on family values, financial stability, and how a person wants their generosity to function in real time.
The Bottom Line
A living inheritance reflects a change in generational thinking. Instead of preserving wealth strictly for later, more retirees are choosing to deploy their equity sooner — at a stage when it can relieve pressure, change outcomes, and be experienced together.
Whether that is “smarter” depends on one question only:
Is your goal to leave something behind — or to improve lives while you’re here to see it?
Talk to your financial advisor to see what is best for you and your family.
Photo courtesy of SHVETS production
