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Death & Money: 5 ways to prevent a wasted inheritance

Monday 3rd of June 2024
By: Stephanie Svendsen and The Australian Business Review

Thank you all for being A: so beautiful when I talk to you all and B: for being so patient. 

In conversation with The Australian, Suzanne Jones explains how to prevent children from blowing their inheritance.

Inheritances are set to surge in size and frequency in the coming years amid the biggest transfer of wealth in the nation’s history.

As Australia’s richest generation, the baby boomers, move through retirement, many are starting to think about what happens to their wealth once they’re gone.

Children will be the biggest beneficiaries of the estimated $5 trillion transfer, but grandchildren will benefit too as people live longer and leave inheritances later.

Coote Family Lawyers partner Suzanne Jones says people can set up a testamentary trust in their will and give it “training wheels”, where the children are a co-trustee with either the will’s executor or an adviser.

“A two-year training period works well before beneficiaries take sole control of their inheritance,” Jones says.

“During this period the beneficiaries can be guided on the way the testamentary trust operates, how to maximise the tax and asset protection benefits of a testamentary trust, and the sorts of decisions that have to be made and when,” she says.

Jones says parents can use testamentary trusts to stagger the inheritance.

“Sometimes a gift of $100,000 at age 21 and the balance of their share of the estate when they turn 25 gives beneficiaries some experience in investment and handling finances,” she says.

Other money experts agree with this strategy, with money released in several bites. They say it gives the children a chance to make a financial mistake, learn from that mistake, and – hopefully after getting some good advice – not make it again.

You can read Suzanne's expert advice in The Australian here: Death and Money: five ways to prevent a wasted inheritance

If you need estate planning advice please call our Wills & Estate Team on 03 9804 0035.




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