We’re about to witness the biggest transfer of wealth in Australia’s history. Over the next couple of decades, more than $3.5 trillion is expected to change hands between generations. Whether you’re preparing to pass on your wealth or set to receive an inheritance, the same questions come up:
Where do we start?
How do we make the most of this opportunity?
And how do we make sure it doesn’t create stress or conflict down the track?
The truth is this isn’t just about money. It’s about values, timing, relationships, and a bit of strategy. Let’s look at both sides of the coin and highlight where things can go wrong because these are pitfalls that can affect any of us.
If you’re the one passing on wealth
1. Start the conversation now
One of the biggest mistakes families make is waiting too long to talk about what they want to leave behind. Avoiding these conversations doesn’t make things easier; in fact, it often leads to confusion, disagreement, and unintended outcomes.
Where things can go wrong:
Family disputes – a parent passes away without having discussed their wishes, and siblings end up in a legal battle over what “Mum would have wanted.” These disputes can fracture families for years, sometimes permanently.
Unclear expectations – an adult child assumes they’ll inherit the family home, only to discover it was left to another relative or charity. The shock can cause lasting resentment.
2. Make sure your estate is structured properly
A Will is just the beginning. You may also need a Power of Attorney, advanced health directive, or a testamentary trust if you want to protect vulnerable beneficiaries or control how your assets are distributed. And remember superannuation doesn’t automatically form part of your estate it needs a separate binding death benefit nomination.
Where things can go wrong:
Outdated documents – a Will made 20 years ago that hasn’t been updated to reflect new family members or changed circumstances can lead to assets going to the wrong people.
Superannuation surprises – many people are shocked to learn their super goes to the person listed on their nomination form not necessarily who they intended.
3. Think about tax before it becomes a problem
Transferring wealth isn’t always tax-free. Super paid to adult children can be taxed. Selling or gifting assets that have grown in value can trigger capital gains tax.
Where things can go wrong:
Unexpected tax bills – a parent gifts an investment property to their child, only to find out they owe tens of thousands in capital gains tax often with money they hadn’t set aside.
4. Living legacy vs. later legacy
Helping your children while you’re alive can be rewarding, but it’s essential to balance generosity with your own retirement needs. Gifting can also affect your eligibility for the age pension, so always get advice before transferring assets or large sums of cash.
If you’re the one receiving wealth
5. Take a breath! You don’t need to act immediately
Inheriting money can come at a difficult time emotionally. There’s often pressure to “do the right thing” with the money.
Where things can go wrong:
Rushed decisions – someone inherits a lump sum and immediately pays off their mortgage, only to later realise they needed funds for urgent medical expenses or that investing the money could have provided greater long-term security.
6. Get advice early
Whether you’re inheriting super, property, shares or cash, understanding what you’ve received, how it’s structured, and the tax implications is crucial.
Where it can go wrong:
Unclaimed benefits – beneficiaries sometimes miss out on superannuation or insurance payouts because they don’t know what they’re entitled to, or they miss critical deadlines.
Tax traps – not realising that income from inherited investments is taxable, or that a portion of inherited super may be taxed if you’re not a dependent.
7. Make it count for your future
Get clear on your goals, invest wisely, protect your own family, and create a Will for yourself as what you do now sets the tone for the next generation.
Wealth transfer is about more than just money. It’s about intention, planning, and communication. Whether you’re giving or receiving, it’s the planning, not just the paperwork, that makes the real difference.
Start the conversation. Ask the questions. And surround yourself with the right people to help you navigate the journey with clarity and confidence. Mistakes and misunderstandings can happen to anyone, but with the right advice and open communication, you can avoid the most common pitfalls and make this opportunity work for you and your family.
Meet Amanda at Viridian Advisory or Find a Planner near you!
The Money & Life website is operated by the Financial Advice Association (FAAA). The views expressed in this article are those of the author and not those of the FAAA. The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article. Nor does it endorse or assume responsibility for the information.