Wondering what your parents’ estate plan means for you? 

Inheritance anxiety is increasing across Australia as greater wealth and longevity among retirees – combined with more complex family situations – fuel uncertainty around the nature and timing of wealth transfers between generations. 

Whether it’s worrying about losing money to step-parents or siblings, uncertainty around potential early inheritances, or confusion about the rules, stress is striking many more people as Baby Boomers begin handing down more than $6 trillion of wealth. 

 

Financial advisers, psychologists and lawyers say the best strategy to avoid anxiety around inheritances is clear: talk it out. 

Lawyers say early inheritances can reduce the likelihood of family legal disputes after death, and financial planners have noted that more seniors are skipping their own Generation X and Millennial children to instead give wealth to their grandchildren. 

Coote Family Lawyers senior associate Nicholas Parker said he had noticed anxiety around inheritances increasing. 

“Often younger and middle-aged people view an inheritance as the only way they will be able to become financially stable or buy a house to live in,” he said. 

“This is also in part due to the increase of blended families” 

“We often hear from clients seeking advice about their inheritance while their parents are still alive, wanting to know if there is anything that can be done prior to their death. In most cases, the answer is to attempt to have a frank – but not forceful – conversation with them.” 

Mr Parker said adult children were becoming more involved in their parents’ estate planning, attending meetings with solicitors and providing their input. 

“In some cases, the parent agrees to this to reassure their children,” he said. 

Older Australians should consider being more transparent with their children about their estate plan, but only if they felt comfortable doing so, Mr Parker said. 

“Anxiety often occurs when children and grandchildren are in the dark and their imagination runs away,” he said. 

Meanwhile, children could be proactive and ask parents if they would be happy to have a family discussion about the arrangements in place and where critical documents such as wills were held. 

However, this should be approached with “the sensitivity that it deserves”, Mr Parker said. 

“Do not be pushy or forceful – an inheritance is not a right and parents are free to leave their estates as they wish,” he said. 

“They are also at liberty to keep these matters confidential. If a parent does not want to discuss their will, being pushy could have the opposite effect from what was intended.”

 

You can read the full article in The Australian here: $6trillion wealth transfer sparks inheritance anxiety  

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