A wave of headlines this year has returned to a number that is hard to ignore. The Productivity Commission estimates that around $3.5 trillion in assets will change hands in Australia by 2050, as the baby boomer generation passes wealth to their children and grandchildren. It is the largest intergenerational wealth handover in the country’s history.

Most families are not prepared for it. Around 45% of Australians still do not have a valid will, and a will alone does not carry the full weight people assume. Superannuation does not automatically form part of your estate. It sits outside your will, governed instead by your fund’s nominations and trust deed, and death benefits paid to adult children can be taxed at rates that surprise families. Testamentary trusts, which currently sit outside the proposed 30% tax on discretionary trusts referenced in recent Budget papers, remain one of the more useful structures for passing wealth down in a protected way. None of this is intuitive, and none of it sorts itself out on its own.

The part that matters most is not the structuring. It is the conversation. Inheritance is one of the few major financial events families rarely discuss. The will gets drafted, the nominations get signed and the adult children find out how it all fits together only after the person who built it is gone, often when it is hardest to take in. The families who do this well are the ones who sit down together, early and unhurried, and talk plainly about what exists, why it is structured the way it is, and what everyone is meant to do when the time comes.

At Newealth, this is some of the most rewarding work we do. We help clients bring the next generation into the picture when they are ready, so that what they have built lands cleanly and the people they love are not left navigating it alone. We work alongside your solicitor to make sure the structures, nominations and wishes all line up. If the $3.5 trillion figure has you thinking about your own family, and the conversation you have been meaning to have, please contact us for a confidential discussion.

General Advice Warning:

The information in this blog is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for you and seek professional advice before making any financial decisions.
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