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5 questions to ask yourself before you pass on an inheritance

How to leave your legacy the right way

Successfully leaving an inheritance requires thought, knowledge and planning to make sure what you leave behind is going to support your heirs rather than hinder their future.

We spend our whole lives planning for our own future and looking ahead. Sometimes, we forget to think about what we leave behind.

You’ve worked incredibly hard for your money and it’s important to know how to protect it and make sure it’s put to good use even after you’re gone.

Planning what to do with your money and your assets when you die can be a bit overwhelming, especially if you have a unique family structure.

With over 80% of Australians planning to leave an inheritance to their children1, it’s incredibly important to know the ins and outs when picking an appropriate option for your family. 

There isn’t one ‘best way’ to leave an inheritance. Everybody is different, everyone has a different family structure and different assets. So, it makes sense that everyone’s plan will be different too. 

The goal is ultimately to transfer your finances and assets from one generation to the next with minimal burden placed on the recipients. Most clients want to do it in a way that ensures their family is secure and protected for the future.

The first step is understanding what you have and what your family needs.   

Here’s 5 questions to ask yourself before you start planning your inheritance:

1. Who are your beneficiaries?

Who do you want to support and provide for? Anyone you are going to leave assets to after you die is a beneficiary. Your partner, children and grandchildren are key considerations here.

Your goal here is likely going to be to support and protect them. So, you must have a reasonable understanding of their financial and personal situation to ensure that your kind gesture is going to suit their circumstances rather than go to waste.

Sometimes you can think you are providing for your children when what you really might be doing is giving the more taxes or fees to pay. Ensure you speak with them and seek advice from a professional team to minimise negative tax implications.

2. What are your assets?

Plan out what your assets are and what you are able to give.

Some retirees give away their retirement savings while they are still alive without considering their own income needs. While it’s important to provide for others, make sure you consider your own finances first.

What about the family home?

If you own your own home, consider how it fits into your estate plan. According to domain.com, the price of an average home in Australia is around $800,0002. If you are planning to sell, consider how this money will be distributed. Or perhaps you want to keep it in the family and pass your home down to a family member?

3. Is generation skipping going to occur?

This is a common strategy if your children have significant assets or savings. By passing assets down to your grandchildren instead, you can potentially avoid your own children having to pay unnecessary taxes or fees.

4. Do any of your family members have greater needs?

Considering your family member’s differing needs can help you decide how to distribute your assets. If you have a family member with a disability or sickness, you may want to make extra sure they are going to be okay and supported. If you have young children, consider creating your plan around them to make sure they are going to be cared for in case something was to happen to you.

5. Is there a need to minimise family dispute?

Every family is different and if it’s anything like my huge family on Christmas Day, you may need to think of ways you can minimise disagreements.

Combining money, family, and death in the one conversation can be a bit awkward – no matter how close we are to our families. Of those who plan to leave an inheritance to their kids, only a third have discussed the plan with their children3.

It is important to talk through your plan with your family members. At NFPG, our financial advisers can facilitate these discussions to make sure everyone is on the same page and all the right questions get asked and answers.

When a family member passes away, it is difficult enough time for a grieving family. Taking the financial burden and tough decisions away during an already challenging time is one way you can minimise squabbles and protect your family – when it matters most.

Answering these questions can help you select the best strategy for leaving an inheritance. Once you have considered these areas, you can start to put the best plan in place for you. Here are two ways you can plan for a successful inheritance transfer:

Creating a Will to leave assets to your heirs

Wills are used to control what happens to your estate after you die. Only assets that you personally own are controlled by your Will.

According to ASIC, almost half of all Australians die without a will4. It is also important to make sure that your Will is properly signed and witnessed otherwise it may not be valid.

IMPORTANT NOTE! Any money you have in your superannuation fund or trust and insurances owned by your superannuation fund are not included in your Will. These will need to be planned for separately – speak to your financial adviser about how to nominate a beneficiary.

Creating a trust fund

A trust creates a fund to be managed by a trustee.

This is most commonly used for children under the age of 18 in the unfortunate circumstance that their parents pass away. Having a trust fund for your children makes sure they are going to be protected and financially secure no matter what happens to you.

Your children will gain control of the trust when they turn 18, however, you can also choose to defer trust access. Sometimes, 18 years old seems too young to have access to savings. You can choose to have the money accessible when they finish university or even at a later age to ensure the inheritance is protected and will be used wisely.

It is this flexibility of a trust that allows you to protect your money and control how your children (or other beneficiaries) spend their inheritance.

When it comes to planning your inheritance, there’s no need to manage it all alone. Our most precious gifts to our family members need to be nurtured and protected.

A Financial Adviser can help you leave your inheritance the right way, minimise any negative tax implications and ensure your legacy is protected.

At Newcastle Financial Planning Group, our personable, experienced, financial planners can work with your solicitor to create a tailored inheritance plan, ensuring your finances and family are secure and protected for their future.

Book a complimentary initial appointment with one of our Estate Planning Specialists. We have offices located in Newcastle – The Junction (NFPG), Central Coast – Erina (CCFPG) and  Sydney CBD (SWA).




1: https://www.smh.com.au/money/super-and-retirement/spending-their-inheritance-your-lifestyle-or-their-legacy-20190514-p51n7x.html#:~:text=A%20survey%20of%20Australian%20superannuation,an%20inheritance%20to%20their%20children.

2: https://www.domain.com.au/news/australias-median-house-rising-back-towards-peak-prices-as-key-market-rebound-922435/

3: Lembit, G., (2019) ‘What do you care about’, Perpetual Client Insights and Analytics, released 26 September 2019.

4: https://asic.gov.au/

DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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