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Why these parents are giving their adult kids an early inheritance

Homes in downtown Toronto. Canada’s housing outlook is more uncertain today than it has been since the financial crisis in 2008-09.

Fred Lum/The Globe and Mail

One of the effects of expensive housing seems to be a change in the psychology of parents about inheritances. A substantial number of parents are helping their adult children buy houses, whether through gifts or loans. Call it an early inheritance.

A recent Manulife Bank survey suggested that 45 per cent of millennial buyers had family financial help. Early inheritances are obviously gaining traction, but we haven't heard much from the parents who are handing over this money. That's why a recent New York Times story is so interesting. It's a first-hand account from a man who, with his wife, has been giving cash gifts to their four adult kids.

This husband and wife are comfortable, not wealthy. But they find themselves with more money than they need on a day-to-day basis and want to share with their adult children. The kids are using the money to buy houses, to save for their own children's education and to help start a restaurant. "I will not waste a minute worrying about how they are going to spend the money," their father writes. "And I am glad we gave it to them."

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