When family wealth changes hands: Why now is the time to plan

“You can have a plan, or you can cross your fingers and leave it to chance.” 

Over the next decade, Australian families will pass about $3.5 trillion to the next generation; within 20 years it’s $5.4 trillion. Roughly $120 billion is already changing hands each year—mostly via inheritance. For many families, this will be the largest financial event of their lives.

Why act now? The key numbers in Australia 

• $3.5T in the next 10 years; $5.4T in 20
• About $120B already transfers per year
• 90% of transfers happen via inheritance
• 65% of inheritances will ultimately be controlled by women
• Gen X now holds more property and shares than Boomers; Boomers still dominate cash
• The “Bank of Mum & Dad” sits among Australia’s top 10 home financiers
• Retirement wave: 226,000 intend to retire in 2 years; 710,000 in 5 (avg intended age 65.4).

“Where there’s a will… there’s a relative…” All the more reason to plan properly. 

This blog explores how to prepare for that transfer of wealth — how to protect your legacy, avoid family conflict, and make sure what you’ve built benefits the people you care about most.

 The problem: How wealth leaks out of the family tree

Think of your legacy as a bucket. You’ve spent decades filling it through hard work, saving, investing, and providing for the people you love. Your job now is to pass that bucket down—without holes.

Unfortunately, many families lose a surprising amount of wealth as it moves from one generation to the next, due to a number of factors.

Leak in the “bucket”	What it looks like	Why it matters
Relationship breakdowns	A gifted deposit disappears in a divorce	Gifts aren’t protected; weak loan docs don’t hold up
Control mistakes	Wrong successor in a trust; lapsed super nomination	Exes or in-laws influence distributions
NSW notional estate	Transfers within three years dragged back into the estate	Opens the door to challenges and legal cost
Illiquid assets	Property/business but little cash to “equalise”	Fire sales and sibling stand-offs
Missing paper trail	Deeds, nominations, passwords scattered	If it can’t be found, it can’t be protected
Tax leakage	Wrong payment pathway or owner/structure	Avoidable tax, levies or CGT at the worst time

 

Case study: The farm, the flat, and the fight that never happened

Image: Freepik

The O’Connors (names changed) had two major assets: a Hunter farm (worked by Liam) and an investment flat in Newcastle. Sister Sophie lives in Sydney and doesn’t want the farm. A 50/50 will would have forced a sale—or resentment.

We built a branch-based plan:

• Equalisation rules so Liam could keep the farm; Sophie received equivalent value over time.
• A documented family loan for Sophie’s next property (clear repayment/forgiveness triggers).
• Successor control locked to lineal descendants—no role for exes.
• A digital vault so the kids could find everything fast.

Outcome: no fire sale, no feud, no courtroom. Same assets, better design.

The solution (high level): design for bloodline, control and clarity

A financial planner’s role is to map your family tree, audit ownership and control, coordinate a specialist estate-planning solicitor, and keep it all current. We aim to:

• Quarantine each child’s share (one branch per child)
• Set lineal-descendant clauses (children → grandchildren → great-grandchildren)
• Lock trustee/appointor succession with backups
• Use staged access (education, home, health, entrepreneurship) instead of windfalls
• Maintain a digital vault of deeds, nominations, registers and passwords.

“Failing to plan is planning to fail.” — often attributed to Benjamin Franklin

Forward tax planning that keeps wealth in the family

With around $120 billion already changing hands each year, timing and structure can make a major difference to how much of your wealth stays within the family.

Forward tax planning isn’t just about reducing what you owe this year — it’s about making strategic decisions now that prevent unnecessary tax erosion, disputes, or financial confusion later. By deciding where assets sit, when they move, and who controls them, you can help ensure that more of what you’ve built is preserved for the next generation.

The table below outlines key decision areas to focus on and why acting early makes such a difference.

Decision area	Decide now	Why it helps
Asset location	Which assets sit in super, trusts or personal names	Lower ongoing tax; cleaner control
CGT/transfer timing	Choose deliberate years for large sales or gifts	Smoother tax; avoid clawback windows
Two rails	Protection rail (rules, quarantining) + Opportunity rail (purpose-based support)	Funds real needs without killing compounding
Family investment policy	Risk, liquidity, purpose, and who decides	Future trustees won’t guess your intent

 

Wealth creation now—and for the next generation

You need investments for today, and governance for tomorrow.

• Core and growth sleeves: A resilient core for stability plus a growth sleeve to preserve purchasing power.
• Branch “purpose buckets”: Education, health, first home, entrepreneurship—planned generosity.
• Letter of wishes: The story behind the numbers—so decision-makers understand the why, not just the what.
• Plan for vulnerability: Include options for children or grandchildren with disabilities or decision-making challenges.

This is your shelterbelt—protecting the family tree today so the orchard thrives for decades.

“Should I just pay off the mortgage?” — Smart instinct, incomplete plan

Paying off non-deductible debt gives a guaranteed after-tax return equal to your interest rate and real peace of mind. But all-in can forfeit opportunity.

Option	Upside	Trade-offs	When it shines
Pay down mortgage	Risk-free return; lower stress	Less liquidity and compounding; concentrated in one postcode	Short horizon; high rates; low buffer
Invest in tax-aware vehicles	Compounding; diversification; flexible estate control	Market risk; needs rules and discipline	Longer horizon; solid buffer; clear governance
Balanced split	Reduces risk and preserves growth	Needs a plan and reviews	Most families, most of the time

 

Quick FAQs (NSW & Australia)

What is intergenerational wealth transfer?

Planned movement of assets to the next generation with clear control, tax-smart structures and documentation.

How do I keep my inheritance in the family tree?

Use lineal-descendant rules, lock in successor control, document loans (not gifts), and keep a digital vault. Review regularly.

What is NSW’s “notional estate”?

Certain transactions up to three years before death can be clawed back into the estate—timing and records matter.

Wrap-up: Pass it on with purpose

You’ve spent years building your bucket—now’s the moment to carry it down the generations without leaks. The numbers are clear ($3.5T over 10 years; $120B every year), and so are the risks: relationship breakdowns, control errors, tax drag, missing paperwork. 

The families who thrive are the ones who plan before the inheritance arrives—mapping the family tree, locking in control, setting simple rules that protect today and empower tomorrow.

“The best time to plant a tree was 20 years ago. The second-best time is now.”

Engaging a professional financial planner brings clarity and confidence. The team at Singleton Financial (Watson Wealth) can map your family tree, lock in control, and design a simple, tax-smart strategy that protects what you’ve built and passes it on with intent.

Contact our team for more information. Our financial advisers can help find the ideal solution for your personal circumstances and future goals. 

Disclaimer

The information within does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information, you should consider its appropriateness regarding your objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of the licensee’s position and are not to be attributed to the licensee. They cannot be reproduced in any form without the author’s express written consent. Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.