Summary: Children rarely struggle with wealth because they were told about it; they struggle because they were not prepared for it. Share values before numbers and in stages, give them real experience with money while mistakes are cheap, and put structures in place that protect what they receive.
The short answer
Start with values and responsibility, not numbers, and tell your children about the family's wealth in stages that match their age and maturity, rather than in a single conversation or, worse, through the will. Most families who handle this well give their children practice with real money while the stakes are still small, involve them gradually in decisions such as charitable giving, and put structures in place, such as trusts with sensible distribution ages, that protect them until they are ready.
The Canadian rules shape how money can be passed down during your life. Cash gifts to adult children are not taxed and their investment income is not attributed back to you, which makes funding an adult child's TFSA or first home savings account a straightforward way to help, while gifts to minor children can bring investment income back to the parent. Gifts and inheritances are also generally protected from division if a child's relationship ends in BC, although growth on them may not be.
Children rarely struggle with wealth because they were told about it. They struggle because they were not prepared for it.
Why so many parents avoid the conversation
Founders often hesitate for good reasons. They worry that knowing about the money will take away their children's drive, that a number will be repeated to friends, or that the conversation will turn into a negotiation about who gets what. Many grew up without money themselves and are unsure how to talk about something they never had to discuss as children.
Silence does not prevent expectations from forming, though. Children notice the sale of a family business, a new house or a change in how the family lives, and they draw their own conclusions, often wrong ones. And a child who learns about significant wealth for the first time from an executor, in the middle of grief, has had no chance to learn how to manage it.
The question is not whether your children will find out. It is whether they will be ready when they do.
What should I tell my children, and when?
The right amount of detail depends on age and maturity far more than on the size of the wealth, and it usually unfolds over years.
Young children. The focus is habits rather than numbers: earning, saving, waiting for something, giving some away and seeing that money is finite even when a family has a lot of it.
Teenagers. Teenagers can understand that the family is fortunate, why that brings responsibilities, and how the family thinks about work, spending and generosity. This is often the right time to give them a budget of their own to manage, with real consequences for running out.
Young adults. As children reach adulthood, which in BC begins at 19, they can be introduced to the general shape of the family's plans: that the money is meant to support the family across generations, what it is and is not for, and what they can and cannot expect. Specific figures are often still unnecessary.
Established adults. Once children have their own careers and families, many parents share more detail, including the estate plan, the role of any trusts and who the executors and advisors are, so that nothing comes as a surprise.
The principle running through each stage is the same: share the values before the numbers, and the responsibility before the rights.
How can I give my children real experience with money?
Experience is the best preparation, and it is easier to provide while the amounts are manageable and mistakes are cheap.
Fund their registered accounts. A parent can give an adult child money to contribute to their own TFSA, up to the 2026 limit of $7,000 a year and any unused room, or to a first home savings account, up to $8,000 a year to a lifetime limit of $40,000. Gifts to adult children are not subject to the attribution rules, so the income is taxed in the child's hands, or not at all inside those accounts, and the child learns to manage an account that is genuinely theirs.
Be careful with minor children. For children under 18, interest and dividends earned on money a parent gifts them are taxed back to the parent under the attribution rules, although capital gains are not, so investing for younger children is usually done through structures designed for it, such as a properly documented trust.
Involve them in giving. Giving a child a say in a family donation, or a small amount to direct each year through a donor-advised fund or a family foundation, teaches them to evaluate requests, think about impact and see wealth as something that carries responsibility.
Let them see the process. Inviting adult children to a family meeting or an annual review with your advisors, even as observers, shows them how decisions are made and introduces them to the people they may one day work with.
How do I protect what my children receive?
The structures matter as much as the conversations, because they protect children before they are ready and after a relationship goes wrong.
Trusts with sensible distribution ages. A will that leaves everything outright to a 19-year-old is often a mistake, however mature the child. Leaving a child's share in a trust, with the capital released in stages or at the trustees' discretion, gives them time to grow into it. For a family trust that already holds assets, such as one created in an estate freeze before a business sale, the trust is generally deemed to dispose of its property every 21 years, so the trustees need a plan for distributing assets before that date.
Protection in their relationships. Under BC's Family Law Act, gifts and inheritances a child receives are generally excluded from the property divided if their relationship ends, but growth in their value may be shared, and money mixed into jointly owned property, such as a family home, can be difficult to trace. Children who keep gifts and inheritances separate, or who put an agreement in place with their partner, are better protected, and this is a conversation worth having before the money arrives rather than after.
Care with dividends from a family company. Dividends paid to adult children from a private corporation are often taxed at the top rate under the tax on split income unless an exclusion applies, such as shares held directly by a child aged 25 or older with at least 10% of the votes and value, so paying children through a family company needs to be checked against those rules first.
The right executors and trustees. The people you name to manage your estate and any trusts will deal directly with your children, possibly for many years. Choosing them is as important as choosing what to leave, and telling your children who they are avoids surprises later.
How do I treat my children fairly?
Fair is not always the same as equal. A child who works in the family business, a child with greater needs and a child who has already received significant help may each warrant a different approach, and many families decide to treat children differently for good reasons.
What causes lasting conflict is rarely the difference itself. It is a difference that was never explained. Recording larger gifts made during your lifetime, deciding whether they should be balanced in the will, and explaining your reasoning while you can, usually prevents misunderstandings that an estate cannot fix.
Where Westmount starts
Westmount Wealth Management is a Canadian portfolio manager with offices in Vancouver, Qualicum Beach and Toronto. It is registered in BC, Alberta, and Ontario and provides discretionary portfolio management to founders during and after a business sale, as well as to incorporated and asset-rich retirees.
For families, the plan for the next generation is built alongside the plan for the parents: how and when wealth passes down during your life and at death, how it is protected, and how children are introduced to the advisors and decisions they will one day inherit, coordinated with your accountant and estate lawyer. The first conversation is a discovery meeting to understand what you want the money to make possible for your family.
Frequently asked questions
When should I tell my kids how much money we have?
There is no single age, and most families share the details gradually. Values and habits come first in childhood, the general shape of the family's plans in early adulthood, and specific figures and the estate plan once children are established adults who can put them in context.
Can I give my adult children money without tax consequences?
Generally, yes. Canada has no gift tax, cash gifts to adult children are not taxed, and income the child earns on the gift is taxed in their hands rather than yours. Gifting property other than cash, such as shares, is treated as a sale at fair market value, so it can create tax for you.
Can I contribute to my child's TFSA or FHSA?
You can give your adult child money to contribute to their own TFSA, up to $7,000 for 2026 plus any unused room, or their first home savings account, up to $8,000 a year and $40,000 in total. Because the gift is to an adult child, the income is not attributed back to you.
How do I protect my child's inheritance from a divorce in BC?
Under BC's Family Law Act, inheritances and gifts are generally excluded from division on separation, but growth in their value may be shared and mixed funds can be difficult to trace. Keeping the inheritance separate, leaving it in a trust or encouraging your child to put an agreement in place with their partner all help, and a family lawyer can advise on the right approach.
At what age should my children receive their inheritance?
Many parents choose not to leave significant amounts outright to young adults, even though adulthood in BC begins at 19. Leaving a child's share in a trust with staged distributions, or at the trustees' discretion, gives them time to gain experience before they have full control.
References
- Canada Revenue Agency, MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE (2026 TFSA limit of $7,000).
- SI Laws, Living inheritance: FHSA and down payment gifts (FHSA limits; no attribution on gifts to adult children).
- RBC Wealth Management, Income splitting using a prescribed rate loan (attribution rules for minor and adult children).
- MoneySense, Who pays tax on cash gifts in Canada?, March 2025 (no tax on cash gifts; deemed disposition on gifts of property).
- Pax Law, Inherited property on separation in BC (excluded property and growth in value under the Family Law Act).
This information has been prepared by Westmount Wealth Management Inc. Westmount Wealth Management Inc. is registered as a Portfolio Manager in British Columbia, Alberta, and Ontario. Westmount Wealth Planning Inc. is a subsidiary of Westmount Wealth Management Inc.
This material is distributed for informational purposes only and is not intended to provide personalized legal, accounting, tax, or specific investment advice. Please speak to a Westmount Wealth Advisor regarding your unique situation.
