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When you pass away, an intergenerational wealth transfer may occur – the transfer of your wealth to the next generation; via the instructions laid out in your Will and super death benefit nomination (if applicable). These instructions will provide clarity around important issues for the administrators and the beneficiaries of your wishes – who gets what assets, at what time and in what manner upon your passing.

However, this is only half the picture. When discussing estate planning and the transfer of wealth, we may also cover whether you will be leaving behind an inheritance or a legacy. What do we mean by this? It’s been said that 70% of wealthy families lose their wealth by the second generation, and 90% by the third*. Whilst you may not think of yourself as being ‘wealthy’, consider this: Currently, Australians aged 60+ have produced in total 7,522,009 children. If, for example, 70% of their current total wealth ($3.5 trillion) were to be transferred to them, then each child would receive roughly $326,000^.

There are several things that you can do now to make sure your child is appropriately ready for this in the future.

*Williams, R., & Preisser, V. (2010). Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values.

^NMP Education & McCrindle Research. (2017). Wealth Transfer Report.