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‘There are a lot of broken expectations’: Inheritance disputes are on the rise as cost-of-living pressures climb

6 days ago 9

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“You end up with a really unequal plan that people might take issue with,” he said.

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Many of these squabbles are rooted in underlying familial dynamics, rather than just money problems, said Carolyn Cole, founder and chief executive of family office firm Cole & Associates.

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Cole recalled a dispute within an affluent family over a rather unassuming heirloom: grandma’s toaster.

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“It was a legally sound, completely airtight, locked-down estate plan, and so the only thing this one sibling could do in screaming out in anger was sue the other one over stealing a toaster,” she said. “It was just the catalyst to the family dynamics that were already existing.”

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However, the process of litigation can be time-consuming and costly for families. Esterbauer said he has seen cases last anywhere from one year to five years, or even longer.

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“Just to get into court … you’re often looking at $20,000 or more, and then to go to a trial, it’s hundreds of thousands of dollars,” he said. “If you’re unsuccessful in the litigation, there’s a chance that you’re going to have to pay the other party’s cost as well, so it can be financially devastating.”

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During the interim, Hooper said these cases can put financial strain on the immediate family of the beneficiary, too, not just the siblings they are quarrelling with.

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“There are a lot of people who, when they find out they’re a beneficiary of an estate, start making financial plans based on that,” he said, adding that the family might intend to use their inheritance to pay for their child’s postsecondary education, purchase a home, fund their retirement savings or even just pay their day-to-day bills.

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The number of initiated probate cases in Canada have climbed by about 13 per cent from the 2014/2015 year to the 2024/2025 year to 27,301, according to Statistics Canada data, though this figure is below the high of 30,668 cases hit in the 2019/2020 year. The data for Ontario, which include contested estate matters only, indicate a 40 per cent jump over the past decade to 3,407 probate cases.

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But Hundal said the uptick in legal disputes could be a matter of demographics as well, not just increased anxiety about cost of living increases. “The boomer generation is one of the biggest generations, and they’re all at that age where they’re dying or they’re losing capacity.”

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Existing court data aren’t necessarily representative of the true volume of inheritance disputes in Canada, Esterbauer said.

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“We see so many barriers to estate litigation. We’ve got really high legal costs, and (there’s) the very public nature of disputes that make their way into court,” he said, adding that some families choose to address matters through mediation and other forms of alternative dispute resolution instead.

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There are several circumstances that can lead to battles over inheritances. For one, Canadians are living longer and older people can often experience forms of cognitive decline, which can lead to arguments around guardianship and power of attorney that continue even after the person’s death, Esterbauer said.

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There has also been an uptick in blended families, where subsequent marriages or common-law spousal arrangements can complicate the division of an estate.

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“A really common type of inheritance dispute we see is where someone is survived by a common-law spouse who was entirely financially dependent on the person who has passed away,” said Esterbauer.

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But one thing many estate litigants often aren’t considering is the potential emotional toll when they seek out a lawyer and go to court, Esterbauer said.

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“A lot of the time, when they finally reach settlement … (they just want) to move on with their lives and grieve.”

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