Transitioning family wealth

As we near 2022’s close and after a third year living with COVID, most of us are looking forward to the holidays and some down-time to spend with family and friends. As the years go by and new generations join the party, the holidays can be a great reminder to talk to one another about the future.

Australia’s ageing population is often discussed in terms of impact on the economy; however, it isn’t often addressed how this impacts individuals and families, and how planning can ease the way forward.

While previous generations could pass on savings or the family home to descendants, in more recent years it is much more common to have a larger or more complicated inheritance. Today, some families are likely to pass on far more significant sums or manage assets on behalf of the family via active businesses, companies, and trusts.

Where to begin

The approach you take to transitioning family wealth will depend on the level of complexity that exists within your possessions. If you have multiple structures and trusts with several beneficiaries or stake holders, deciding how it will work for your family beyond your lifetime will not be a quick or simple decision. Though it may not be required immediately, it can be important to have considered and implemented a framework and polices in the event of ill health and as we age.

Alternatively, you might consider whether funds will be inherited directly, or if a trust (testamentary, disability trust or special purpose trust) is required. For recipients who may need assistance managing their wealth, careful consideration will be needed as to the execution of the estate, how decisions are made, and whether a professional or entity should be engaged.

Educate and guide

Implementing a structure to guide decisions can be helpful for family members as they begin to inherit control of family assets.

Understanding the goals and objectives of the entire family leads to a smoother transition and can help avoid conflict. Having a defined investment strategy with specific objectives and a risk profile consistent with family objectives will ensure everyone is informed and expectations are met.

Your involvement prior to the inheritance being passed on can provide the opportunity to guide and impart your value system and approach and legacy.


The time you decide to inform family of what the bequeathment may look like can also vary depending on personal preferences. Every family is different and handles wealth differently.

Some clients opt to do this at a later stage. Some believe the knowledge of a significant inheritance can change their descendant’s attitude toward what they decide to pursue in their life, and whether they depend on this knowledge. Living longer means that often a potential inheritance can be delayed beyond the working life of children to a time when its value is reduced. For this reason, some clients decide to inform their descendants and provide additional support earlier in their lives, to support their growing families, or improve their lifestyle and increase opportunities at a younger age.

Either way, the answer to when you discuss these financial matters with your children depends on your own relationships and objectives.

Equal or equitable

Children from the same family can respond differently to receiving their inheritance and to the division of funds. It is worth considering what money means for each family member, and what contribution they may already be making to assets such as the family business or a family farm. You may also have family members in different financial situations going into the inheritance – some may be struggling to make mortgage payments, while others are building large assets of their own.

As we begin a new year, now can be time to start the planning process and begin discussions with family and loved ones. BDO’s Private Wealth Advisers can support you in the planning and execution of the distribution of your assets. Reach out to your local adviser for support in creating a structure or trust, understanding stakeholder objectives and preparing for the future.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances. BDO Australia Ltd and each BDO member firm in Australia, their partners and/or directors, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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