Beyond Inheritance: Why Australian Families should use their wealth now

For Australian families, wealth has traditionally followed a simple path – earn it, grow it, live from it in retirement and eventually pass it on as inheritance. What’s often overlooked, however, is the opportunity to use that wealth more proactively, creating meaningful benefits for the entire family across generations. This is more relevant than ever, with Australians set to experience one of the largest intergenerational wealth transfers in history – an estimated $3.5 trillion over the next 20 years (Manly Financial Services, 2025).

I recently joined the Making Cents of it All podcast to discuss what Family or Generational wealth really means in practice. We explored the value of viewing the family collectively, the role of the “Significant Individual” and the next generation, and the importance of structure and timing in wealth management. We discussed how moving beyond narrow financial planning, tax-driven responses and traditional inheritance models, towards a more holistic, proactive and collaborative approach can create more wealth opportunities and build stronger financial futures for the entire family and a material increase in quality of life.

While inheritance will always play a significant role, the conversation highlighted just how much more can be achieved when Significant Individuals treat wealth as an intergenerational resource rather than something to be passed down. Strategic thinking and structuring lets families seize opportunities now. At the same time, it builds long-term security for future generations, supports greater wealth preservation and an opportunity to enjoy engaging with one another. Importantly, the next generation are able to take an educated and supported approach to their own financial future at an early age, providing all generations with a sense of control and peace of mind.

Who is the Significant Individual?

At the heart of any family wealth strategy are the Significant Individuals (or individual), the people (or person) who have accumulated the assets and carry the responsibility for how that wealth is managed and shared. These individuals can set the tone for the family’s financial future, making decisions that can create opportunities that extend beyond their own lifetime.

However, being a Significant Individual or Individuals doesn’t necessarily mean that you are exceedingly wealthy. Even families with more modest wealth or assets can adopt meaningful intergenerational wealth strategies and produce maningful outcomes. What matters is that the individual’s financial choices have a real impact on the family, whether through investment decisions, asset allocation, or planning for future generations.

People often review their wealth plan during major life events or “trigger points,” such as approaching retirement, receiving an inheritance, selling a business, or even changes in tax laws. These moments are opportunities to step back, assess your position, and make decisions which benefits not only the key decision makers but the entire family across generations. A private wealth advisor can provide guidance during these crucial decision points, assist in the conversations, and provide options for clear decision making.

What is Family Wealth Management?

Family wealth management or private wealth management is about managing wealth and handling assets, and creating strategies that benefit multiple generations of a family, not just the current one.

Rather than simply leaving an inheritance, the Significant Individuals can structure the family finances strategically through investment planning, family trusts, or long-term superannuation strategies to protect and grow wealth for the family’s future.

As a simple example, parents may decide to lend savings to children at preferential rates instead of leaving it in low-interest accounts. This may then facilitate younger generations entering the property market, reduce debt, or invest, keeping wealth circulating in the family while improving financial outcomes for everyone. By taking this approach, parents can ensure that wealth becomes a resource that supports not just their own needs, but those of children and grandchildren. In this simple example, assuming the Significant Individuals’ living needs are not impacted:

• the children have access to funds much earlier than after the death of the parents;
• the family now have greater assets (new home or more valuable home) with long-term tax-free growth potential; and
• the children’s standard of living is improved; and
• importantly, the children and parent’s quality of life is improved.

Each family (and each individual in the family) is different and there are many opportunities to achieve significantly greater financial outcomes, but also educate, empower and enable the younger generations at an earlier stage in life.

Is This Just a Handout?

No –it’s about giving a hand up, not a handout but it is also evident that the overall wealth generated is greater by a broader family wealth strategy as:

• the timeline for investment is correctly increased to 50-60 years, changing the risk profile of strategies where the timeline might be 20 years and focussed only on the Significant Individuals;
• the next generations incomes increase the capacity to borrow meaning more assets growing in value;
• tax benefits from better structuring, for example (simple) by utilising investment in children’s principal places of residence and repaying non-tax-deductible debts create meaningful cashflow benefits; and
• overall cashflow savings being allocated to investments in accordance with the long-term strategies of the next generation.

The distinction (between the hand up not a handout) is important: it is not about simply giving money to children or grandchildren to spend as they wish. Instead, it’s a structured approach that helps younger generations take control of their financial future while creating real, lasting value for the family.

By providing guidance, resources, and access to funds (for example, lending surplus wealth at low interest within the family) allows the next generation to reduce debt, invest, or build assets at a significantly earlier time in their lives. This approach ensures they gain experiences, responsibility, and a sense of ownership over their wealth journey. The sense of purpose and control over their future materially improves their quality of life and that of the Significant Individuals as financial future becomes one less thing to worry about.

Unlike traditional inheritance models or ad hoc gifts, proper family wealth strategising keeps the wealth active, protected and focused on the long-term while still prioritising the living needs of the key decision makers. It differentiates from individual focussed advice by combining strategy with protection: the family benefits collectively, but the person controlling the wealth maintains oversight and safeguards their own financial position.

What Risks Are Associated?

Family or Intergenerational wealth strategies offer significant opportunities, but they also carry risks which should be identified, and carefully managed.

• Tax-driven decision-making risk: Focusing solely on avoiding taxes – such as rushing to withdraw money from superannuation to stay below the $3 million cap, can lead to decisions that overlook the broader family wealth strategy.
• Investment risk from narrow focus: Concentrating on specific asset types to optimise tax outcomes can inadvertently limit long-term growth or fail to meet the needs of the whole family.
• Inflation and bank margin risk: Keeping surplus funds in low-interest accounts or fixed deposits may erode purchasing power over time. Similarly, lending within the family needs careful structuring to account for interest rates and market fluctuations.
• Overfunding and divorce risk: Excessive contributions or mismanaged intrafamily arrangements can create complications, especially in blended family situations or if beneficiaries face legal challenges.
• Handout risk: Simply giving away money without a structured plan can undermine the next generation’s ownership, responsibility, and engagement with their financial future.

What Are the Benefits Associated?

Family wealth management strategies go beyond giving the next generation access to wealth – they aim to improve the financial wellbeing of the entire family while protecting the Significant Individual:

• Collective decision-making: A whole-of-family approach ensures resources are used efficiently, creating shared opportunities without compromising individual lifestyles or financial positions.
• Long-term and inflation-aware planning: Generational thinking enables more patient, growth-oriented investment and protects value against inflation.
• Improved access to property: Younger generations can access loans or deposits sooner, redirecting rent payments into equity growth and helping them enter the property market earlier.
• Emotional satisfaction: Significant Individuals gain the reward of seeing their family thrive during their lifetime, experiencing the impact of their wealth in real time rather than only after they pass.

Why Timing Matters

Family Wealth Management is not just about how access to wealth and assets occurs – it is also about when and under what terms, if any. Inflation, opportunity cost, and the rising cost of living means that a dollar used today can be far more impactful than a dollar given 20 years from now. Acting earlier allows your family to unlock compounding benefits, reduce tax burdens, and improve their financial futures. Importantly, early education and empowerment provide a material head start on establishing their own path to self-funded retirement and the ability to assist their own children.

The key is to make decisions while the Significant Individuals feel secure and in control, so wealth can be structured in a way that benefits both current and future generations.

If you’d like to explore how Family Wealth Management could work for your family, speak with one of our Private Wealth Advisors today. Together, we can create a strategy that protects your position while maximising opportunities for the generations to come.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.