Boomers are set to leave behind $224 billion of inheritance each year between now and 2050, in large part thanks to Australians accumulating more wealth in recent decades. According to the Productivity Commission, that figure is more than double what it was in 2002, and over the past 20 years, almost $1.4 trillion has been passed on via inheritances.
For better or worse, we’re living through an era of intergenerational wealth transfers like we’ve never seen before. Billion and trillion dollar topline figures aside, the Productivity Commission also shows thatshows Australians aged over 65 are currently spending more money than any other cohort of the population.
The dark side to this idea we seem to have of Boomers living large while the rest of us struggle is a troubling rise in what the NSW Ageing and Disability Commissioner Robert Fitzgerald referred to as an emerging phenomenon of “inheritance impatience”. The first thing to remember is, and I cannot stress this enough, you’re not entitled to an inheritance.
But for those not in this position, having a conversation about a loved one’s financial plan once they’re gone, or what you’re able to expect, can feel fraught. If there’s one thing people feel more awkward talking about than money, it’s a death that hasn’t happened yet. A few years ago, I heard of a woman leaving 90 per cent of her wealth to the Lost Dogs Home and the remaining 10 per cent to her children. While her children likely felt entitled to more due to their relationship to her and were surprised to learn of her donation, the woman clearly felt her values aligned more with a not-for-profit organisation, as was her right.
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