Estate Planning – Protecting Your Inheritance Decisions
As more and more Australian’s decide to transfer assets to their loved ones while still alive, how can they ensure that their inheritance decisions are suitably protected into the future?
Demographically, Australia is experiencing significant intergenerational wealth transfers and will continue to do so for some time.
In 2018, over $120 billion was transferred in inheritances or gifts. The Productivity Commission estimates that inheritances and gifts will increase fourfold between 2021 and 2050.
Most inheritance recipients are now aged in their 50s at the time of inheriting, with older parents increasingly looking to transfer wealth to their children while still alive.
The so-called ‘Bank of Mum and Dad’, known colloquially for funding younger Australians to secure housing they would not otherwise be able to afford, continues to grow ensuring children are able to acquire assets they could not otherwise obtain if they were borrowing from a commercial lender.
This growing trend presents challenges in protecting family wealth against future relationship break ups of the younger generation. What happens when a claim is made by a child’s partner or spouse against the assets gifted, or that they are assisted to buy, through family generosity?
Increasingly, parents are turning to estate and family law planning lawyers to assist them to transfer assets to their children during their lifetime. Parents want to see their children enjoy those assets, but with safeguards to ensure their generosity is protected against any future break up or court claims.
Financial Agreements are a tool available to assist people who are in a potential or current de facto relationship or marriage to set out how they would want their assets dealt with in the event they were to separate.
Third parties can be involved in the agreement itself as a guarantor or a third-party payer or may insist that the gift recipient enters into a Financial Agreement as a condition of receiving a gift.
For more information and expert advice to ensure that your inheritance decisions are suitably protected, ask to speak to an estate planning lawyer at Ezra Legal on (08) 8231 6100 or email reception@ezralegal.com.au.
For information on the range of estate planning services that we provide at Ezra Legal, head to:
Julian Roffe
Practice Manager
