There’s been talk in recent years about the fact Australia will soon face the largest intergenerational wealth transfer in history.
What exactly is an intergenerational wealth transfer? Well, it’s a euphemism for the inheritance you stand to receive when your parents leave this mortal coil. Specifically, it’s the $3.5 trillion that the X & Y Generations will inherit over the next 20 years. According to Griffith University researchers, each recipient will inherit an average of $320,000.⠀⠀⠀⠀⠀
Seems a bit morbid, doesn’t it? But that might be the problem – no one wants to talk about it. Over half of Aussies don’t have a will, yet hope that their children will invest their inheritance wisely.⠀⠀
Building intergenerational wealth isn’t just for the elite. But unfortunately, the average Joe isn’t necessarily setup to maintain and grow any wealth they inherit. In fact, it’s estimated that 70% of families will lose their wealth by the second generation, and 90% will lose it by the third.
So, this week, perhaps broach the subject with your parents. Do they have a plan in place for passing the baton, and what do they hope for their financial legacy?
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