A new survey finds that 19% of the people polled would risk their own financial security to support their adult children, according to a recent article in the Toronto Star.
The rising cost of post-secondary college is one of the factors causing adult children to be increasingly reliant on their parents for financial assistance. According to the Government of Canada, a student attending CEGEP, trade school, college or university full-time today can expect to pay between $2,500 and $8,000 per year or more in tuition alone—not including books, supplies, student fees, transportation, housing and other expenses. In fact, full-time students in Canada paid $14,500 on average to cover a year of post-secondary expenses in 2003-2004. That's roughly $58,000 for a four-year program.
John Tracy, a senior vice president at TD Canada Trust cautioned in a release, “As a parent, it’s natural to want to help when children struggle with finances, but it’s important this support does not compromise your own financial stability and retirement savings goals.”
Financial dependence can also compromise your estate planning goals. The financial dependence of an adult child on your financial support can lead to potential litigation through a dependant’s support claim after your death. For more information about recent case law in a dependant’s support claim, check out Paul Trudelle and Noah Weisberg’s podcast here.