• Shaun O'Keefe I Financial Adviser

The great family wealth transfer

Updated: Oct 28, 2021

In 2017, the Australian Financial Review ran an article about the great family wealth transfer to take place over the next 10 to 20 years. This is due to the Baby Boomers, the greatest generational spike the world has ever seen, who are now entering their senior years.

The article stated;

We are on the verge of the largest intergenerational wealth transfer in history. Some estimates suggest Australia will see more than $3 Trillion change hands over the next 10 to 20 years as the Baby Boomer generation pass on their wealth to others.

The 'others' referred to in the article generally consist of the children of the Baby Boomer generation who are either on the verge of entering retirement or just in their retirement 'honeymoon' years. It's their parents, those Senior Australians entering their frail years, that are part of the Baby Boomer wave about to break upon the nation. And the nation, in many ways, is not quite prepared for impact due to the mounting strain on the Aged Care sector and the lack of uptake from qualified financial advice professionals to address this need.

A million dollars is a lot of money but kind of within the realm of most peoples comprehension. $1 Trillion, however, is one million dollars multiplied by one million dollars - it's on a different level altogether. If you stacked up $1 Trillion in $100 notes on top of each other, this giant tower of money would reach 1,015 km from earth into space.

Now, $3 Trillion - forget it. It's surreal.

And this is the amount of wealth accrued over multiple property cycles and stock market booms that are about to move down the generational line.

The KPMG 'Super Insights 2019' report states that the Australian superannuation industry holds almost $2.7 Trillion in assets. That is just shy of the total wealth in transit. So in effect, we are in the midst of something like the total value of the Australian superannuation sector about to move from Grandad to Dad.

The responsibility here is how to prepare your family to retain this wealth. Those 'death taxes' such as Capital Gains Tax (CGT), Stamp Duty, Income Tax and Superannuation tax for non-dependants have the ability to slice into your family's wealth. But this doesn't have to be.

Here are a few considerations;

  1. Prepare a plan for your family to control the wealth that they are set to inherit through proper Estate Planning. An Estate Planning specialist will use Wills that contain Testamentary Trusts to control the assets being transferred from one generation to the next in the most secure and tax-efficient way so that the estate thas the chance to last as long as possible.

  2. For your loved ones requiring Aged Care, obtaining the correct financial advice on how to pay the accommodation deposit, the daily care fees, calculating the correct Aged Pension entitlements along with how to treat their current assets is vital. Being deliberate in this step, and seeking appropriate financial advice, will prevent unnecessary wastage of a family's future inheritance. This means that there will be more wealth to transfer while maximising the Aged Care benefits and other entitlements for your loved one.

  3. Where possible, have an open family discussion about what this moment in time may mean for your family to set up for future success. The family Patriarch's and Matriarch's need help from their family to understand their needs at this time and how best they can arrange their personal affairs to meet the needs of their family. In turn, the receiving generation needs help and wisdom on how to responsibly manage the wealth they are about to inherit.

This is a time of unprecedented wealth moving from one generation to the next. But above all, this is a time for families to come together to support each other with grateful hearts and for intergenerational wealth to be a builder of a family legacy rather than something that will tear it apart.


Shaun O'Keefe thinks that families are important. He's found that he can help more people, more effectively when he helps families. As a fee-based financial planner, he works with families just like yours to bring personal values and financial resources in line so that you can keep focussed on the priorities in your life.

The information contained in this article is general in nature only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision concerning a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.


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