The Great Wealth Transfer: A Practical Perspective
In financial advice, there’s always some new trend or headline, but one shift that’s genuinely shaping client conversations right now is the Great Wealth Transfer.
Over the next couple of decades, we’re set to see around $3.5 trillion move from older Australians to the next generation. It’s already happening – and from my experience, it’s not as simple as "here’s the money, good luck."
At AS Wealth Advisors, I work with clients at both ends of this transition – those planning to pass wealth on, and those receiving it.
My focus is always the same: making sure the money is managed in a way that’s tax-efficient, secure, and aligned with their personal financial structure.
One thing I see often is that without the right planning, opportunities are missed.
Wealth can easily be eroded by poor timing, unnecessary taxes, or decisions made without understanding the full financial picture.
Here’s what I typically look at with clients navigating wealth transfer:
– Cash flow and debt first
If someone is receiving a lump sum, the first question isn’t "how to invest it" – it’s "how does this fit into your overall financial position?"
Often, it’s smarter to use the funds to clear non-deductible debt, like a home loan, before thinking about investing. Paying down debt at high interest rates can put clients in a stronger position faster than chasing investment returns.
– Tax planning
Large inheritances can trigger tax obligations if not handled properly.
We might look at options like contributing to superannuation, or using an investment bond if appropriate, to minimise tax and keep the wealth working hard.
– Protecting lifestyle
For clients passing on wealth, it’s critical to ensure their own lifestyle isn’t compromised.
It sounds obvious, but it’s common for people to want to be generous without first making sure they have enough for their own needs – especially with increased life expectancy. I help clients scope out their position first before making any major transfers.
– Using structures wisely
For clients wanting to hand down wealth to the next generation, particularly younger beneficiaries, structures like testamentary trusts can be important.
They allow control over how money is accessed and protect against risks like relationship breakdowns or financial mismanagement down the track.
While wealth transfer is sometimes talked about in emotional terms, my approach is more practical:
It’s about making the money work as efficiently as possible, while protecting both the giver and the receiver.
Good structure, good timing, and good planning make the difference between wealth that grows, and wealth that slips away.
If you’re thinking about your own situation, it’s worth getting the right advice early. A few smart moves now can make a big impact later.
Read more in this article: https://www.financialstandard.com.au/news/aussies-need-help-to-navigate-the-great-wealth-transfer-fidelity-179808132