For many families, wealth transfer used to mean leaving an inheritance through a will. Increasingly, however, Canadians are considering living gifts which are transfers of wealth made during one’s lifetime. This shift reflects not only changing economic realities, but also evolving values around family support, legacy, and financial planning.

Why Consider Living Gifts?

Affordability and Wage Growth

The gap between incomes and housing costs continues to widen. Since 1981, . Younger Canadians often struggle to buy homes or achieve financial stability, while older generations hold much of their wealth in real estate. For many parents and grandparents, offering financial support now – whether for a down payment, education, or debt reduction – can make a meaningful difference during a period of unprecedented affordability challenges.

Helping When It Matters Most

While an inheritance provides a future benefit, many families recognize that financial support has greater impact when children and grandchildren are younger, establishing careers, or raising families. A living gift can create opportunities and reduce financial stress during critical life stages.

Strengthening Family Relationships

Gifting during life allows you to see and experience the impact of your generosity. It can bring joy, create shared experiences, and strengthen intergenerational bonds. It also provides clarity which can reduce the risk of disputes later, since intentions are expressed in real time.

Tax and Estate Planning Advantages

Unlike the United States and other jurisdictions, Canada has that can play an important role in broader tax and estate planning:
Reducing estate size prior to death may minimize probate fees and simplify settlement.
Charitable giving during life generates tax credits and allows you to direct support to causes you care about.
Trust structures can provide longer-term control over how wealth is distributed, while still shifting assets out of your estate.

Specific Strategies for Living Gifts

Direct Financial Support to Loved Ones

Cash gifts to adult children or grandchildren in most cases create no tax consequences to the recipient, though families should be mindful of specific income attribution rules around gifting to minors. Consulting with a financial or tax advisor is always wise.
Education savings through RESP contributions are not only impactful, but also eligible to be partially matched through federal education savings grants and they will be invested and grow until used for future education expenses, meaning these types of gifts can offer enhanced value.

Assisting Loved Ones with Housing

Contributing to a down payment in the form of a cash gift can be made tax-free and as housing prices have risen, so too have required down payments.
Gifting of property. Canada affords special tax treatment to principal residence properties and the gifting of a principal residence without tax consequences is possible. In the case of multiple properties (vacation property or rental), gifting is still possible but will trigger a deemed disposition and probable taxable capital gains.

Charitable Giving

Donating qualifying investment assets with unrealized capital gains can help avoid triggering the embedded capital gains and still allow the donor to receive a charitable tax receipt for the market value of the assets.
Setting up a Donor-Advised Fund (DAF) for a family legacy of giving through a sponsoring foundation allows you donate once, receive an immediate tax receipt, and then recommend charitable grants by that foundation over time. Assets grow tax-free, so your impact can increase while you decide where to give. A private foundation is also an option, but for many a DAF is easier and less costly but gives similar flexibility.

Family Trusts

Establishment of an inter vivos trust can be used to manage income splitting, to support specific beneficiaries, and/or to protect assets. Useful for families who want structure, control, or protection in how wealth is used.

Strategic Timing of Family Giving

Consider gradual gifting over time rather than one large transfer to help avoid the risk of over-committing funds you might later need for health care, retirement, or unforeseen expenses.
Align giving with life events such as acceptance into higher education, home ownership, or birth of a child can ensure that impact of giving is felt at critical life moments

The Bottom Line

Living gifts aren’t just about wealth transfer – they are about impact, timing, and values. By giving now, you can ease the pressures facing younger generations, contribute to causes you care about, and experience the joy of seeing your generosity in action.

Careful planning is key. Professional advice from a financial advisor can help ensure gifts are structured in a way that supports your family, optimizes tax exposure, and reflects your long-term goals.