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Over the next few years, a significant shift in wealth is expected as baby boomers prepare to transfer approximately $175 billion annually to the next generation through their wills.
According to a recent survey conducted by Finder, nearly two-thirds, or 63% of participants, indicated they intend to bequeath money or assets after their passing.
Among those with plans to distribute their estate, a significant portion, 63%, intends to leave the majority of their wealth to their children, whereas 22% are prioritizing their partners in their wills.
Meanwhile, 5% of respondents plan to allocate their estate to extended family members, and 4% aim to leave their assets to their siblings.
The Productivity Commission has highlighted this impending wealth transfer, estimating that baby boomers will distribute around $175 billion annually in the coming decades. This surge in household wealth is partially attributed to escalating property values and a robust stock market.
Finder personal finance expert Sarah Megginson said wealth transfers were large and growing.
“Australia is on the cusp of the largest intergenerational wealth transfer we’ve ever seen. The decisions families make now will shape financial outcomes for decades,” she said.
Megginson said for many parents, leaving an inheritance is about giving their children a head start in an increasingly expensive world.
“The fact that children are the clear priority reflects rising living costs and housing affordability pressures, with many Australians wanting to ease that burden for the next generation,” she said.
“An inheritance can be life-changing, but it can also be fleeting if it’s not managed wisely.”
Megginson urged Australians to have a legally valid will in place to clearly set out how their assets should be divided, and to establish who would manage the estate.
“It’s far better to make these choices early and communicate them clearly, so loved ones aren’t left confused or disappointed down the track,” she said.
“If you’re likely to receive an inheritance, think carefully about how you can use that money wisely – not just for today, but in a way that creates long-term financial security for future generations.”
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