Why Inheritance is Becoming a Very Big Deal

Of all the topics I write about, inheritance is one that will be gaining more attention over the next five years. Why?

Because Australia is about to see a huge wealth transfer, with more than $3.5 trillion set to be handed over by baby boomers to the next generation – the largest wealth transfer in our nation’s history.

While this is an exciting opportunity for many who will benefit from a potentially life-changing amount of money coming to them, what they do with it will be of paramount importance to future generations. And, while nobody likes to think about dying, for those giving, it is equally important that your gifts are structured correctly so your legacy is given to the people you intend it.

So what does this mean in reality? It really means that you have got to start the conversation now. How? Talking about money and inheritance can feel very taboo. It can also set emotions rising within your family, so many people avoid it.

This is why I have developed some tools to get both sides of the inheritance equation talking. In our free resources (link) you can find a list of things you should be thinking about when it comes to inheritance. And most importantly, a list of questions to ask yourself and your family to start that conversation.

The first should always be – what is the intention with this gift? For the giver, are your hoping to give your family security, a home, a gift to educate future generations? Think very carefully about what you intend your legacy to represent.

Many Australians will be leaving homes that have increased in value tenfold. This means in some cases millions of dollars will be distributed amongst their families. How do you want this to be treated? Are there any conversations you want to have with your children before this event?

And for those receiving, how do you intend to use it? Can you take the opportunity to think deeper about what you really want from your life? Do you want to move? Start a new career? Educate your children a different way? Or just enjoy the freedom of paying off your mortgage? The more intentional you are about how you use this gift, the more that wealth transfer will lead to creating an investment in the future that will keep giving for generations to come.

And finally, also think about what difference you would like to make from a social and/or environmental perspective. Can you give some of your windfall to make the world a better place? Rather than just manage your finances, can you help support a cause that is close to your own heart and give? Whether it be for animals, children, the elderly or the planet, there are so many fantastic causes out there that desperately need financial support. Sharing your gift, or even leaving some of your legacy to this is all part of the circle of life.

So don’t just think of inheritance as financial freedom for you, or of giving something the kids to divide up when you are gone. Rather, use it as something to open up conversations between the generations, and talk big picture about how you can change the world. It’s a conversation worth having.

Until next time,