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Intergenerational wealth transfer

Intergenerational Wealth Transfer Tips & Tricks

Intergenerational wealth transfer is the process of passing assets, wealth, and financial resources from one generation to the next, typically from parents or grandparents to their children or grandchildren. Effective financial planning for intergenerational wealth transfer is crucial to ensure a smooth and tax-efficient transfer of assets while achieving the financial goals of both the current and future generations.

Here are some key steps and considerations for successful intergenerational wealth transfer:

Set Clear Goals and Objectives

Start by identifying your financial goals and objectives for both the current and future generations. This may include providing for retirement, funding education, buying a home, or philanthropic endeavours.

Develop a Comprehensive Estate Plan

Work with an experienced estate planning lawyer to create a comprehensive estate plan. This should include wills and powers of attorney to ensure that your assets are distributed according to your wishes.

Understand Tax Implications

Be aware of the tax implications of wealth transfer. In Australia, if your superannuation is transferred to a non-financial dependant, tax could be paid. Explore strategies to minimize tax liabilities, such as gifting and/or setting up trusts.

A trust structure can be a powerful tool for wealth transfer. A trust allows you to specify how and when assets are distributed to beneficiaries. They also can provide asset protection benefits.

Consider Life Insurance 

Life insurance policies can be used to provide a source of liquidity to cover taxes or to equalise inheritances among beneficiaries.

Engage in Regular Financial Communication

Open and transparent communication with family members is essential. Discuss your intentions, values, and financial plans with your heirs to manage expectations and reduce potential conflicts.

Regularly Review and Update Your Plan

Life circumstances, tax laws, and financial goals can change over time. Periodically review and update your wealth transfer plan to ensure it remains aligned with your objectives.

Seek Professional Advice

At WLM Financial Services, we have over 20 years of working with families to ensure wealth transfer is completed in a smooth, tax-efficient manner and meets your desired goals and objectives. Through our Wealth Oneness approach, you have access to both financial planning and accounting professionals under one roof.

How can WLM help?

Contact us for a cost and obligation free discussion.

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