There’s been talk in recent years about the fact Australia will soon face the largest intergenerational wealth transfer in history.
What exactly is an intergenerational wealth transfer? Well, it’s a euphemism for the inheritance you stand to receive when your parents leave this mortal coil. Specifically, it’s the $3.5 trillion that the X & Y Generations will inherit over the next 20 years. According to Griffith University researchers, each recipient will inherit an average of $320,000.⠀⠀⠀⠀⠀
Seems a bit morbid, doesn’t it? But that might be the problem – no one wants to talk about it. Over half of Aussies don’t have a will, yet hope that their children will invest their inheritance wisely.⠀⠀
Building intergenerational wealth isn’t just for the elite. But unfortunately, the average Joe isn’t necessarily setup to maintain and grow any wealth they inherit. In fact, it’s estimated that 70% of families will lose their wealth by the second generation, and 90% will lose it by the third.
So, this week, perhaps broach the subject with your parents. Do they have a plan in place for passing the baton, and what do they hope for their financial legacy?
Get in touch if you’d like our suggestions for ethical, experienced financial advisers or lawyers – we have several in our network we’d be happy to introduce you to.