Will You Inherit It or Use It?
Australia is approaching one of the largest intergenerational wealth transfers in our history.
As the baby-boomer generation ages, substantial amounts of wealth accumulated through property, superannuation, investments and other assets are expected to pass to younger generations.
Recent estimates suggest that between $3.5 trillion and $5.4 trillion could be transferred between generations over the next two decades. (See our recognition of sources at the end of this article.)
These figures are substantial. However, they do not mean that every dollar will eventually pass through a deceased estate.
Increasingly, Australians are transferring wealth during their lifetimes. Parents and grandparents may help children buy a home, support education, assist with business ventures or provide financial help when circumstances are difficult.
At the same time, many retirees are retaining significant amounts of wealth throughout retirement. This raises an interesting question:
Will the wealth you accumulate ultimately be inherited by your family, or could some of it instead be used to:
- Improve your own retirement while you are still able to enjoy it,
- Improve the financial outcomes for family members during your lifetime, or
- Be put to philanthropic use to benefit the community?
How much wealth is expected to change hands?
The Productivity Commission’s comprehensive 2021 research into Australian wealth transfers estimated that around $1.5 trillion was transferred between Australians from 2002 to 2018. It found that most transfers occurred through inheritances, although gifts made during people’s lifetimes were also significant.
More recently, JBWere’s Bequest Report estimated that total Australian inheritances could reach $5.4 trillion over the 20 years from 2024. It estimates that inheritances were worth around $150 billion in 2024. These figures can appear daunting, but meaningful intergenerational transfers do not have to be measured in millions. JBWere reports an average inheritance of just over $212,000 and an average gift of just under $20,000. For many families, amounts of this size can provide meaningful support at an important stage of life.
These broader estimates should not be treated as precise forecasts. They use different methodologies and assumptions and cover different periods and types of wealth transfer.
Nevertheless, they illustrate the scale of the change that is underway. Australia’s ageing population is an important part of the story.
JBWere expects the number of deaths each year to increase substantially over coming decades as the population ages. This suggests that the annual flow of inherited wealth is also expected to increase.
The Australian Treasury’s 2026 Intergenerational Report, released in September 2026, also highlights ageing and intergenerational equity as important issues for Australia’s future. The report considers the country’s economic and demographic outlook through to 2065–66.
Those questions raised above might be resolved as you consider –
An important qualification: Your retirement should come first
Providing financial assistance to children or grandchildren should not compromise your own financial security.
A gift that seems affordable today may look very different if your circumstances change. Retirement can last for 20 or 30 years or more, and future costs may include health care, home modifications, aged care and other unexpected expenses.
This is why intergenerational wealth planning needs to consider two competing objectives:
How much do I need to retain to support my own retirement?
and
How much can I comfortably transfer to the next generation?
The answer will be different for every family. Particular wealth strategies need to be applied to individual assets.
Our article, How Much Can We Spend in Retirement?, explores the challenge many retirees face when balancing financial security with enjoying the retirement they have worked towards.
Using your wealth rather than simply preserving it
For some retirees, the most appropriate strategy may be to make targeted use of their wealth.
That might involve:
- travelling while you are healthy and active;
- renovating or improving your home;
- helping family members with major expenses;
- contributing to your grandchildren’s education;
- downsizing to a more suitable home;
- making charitable gifts; or
- simply enjoying a higher standard of living.
None of these decisions should be driven by a desire to “get rid of” your wealth. The objective is to make sure your wealth serves the purpose for which you accumulated it. For some people, that purpose is primarily financial security. For others, it includes experiences, family support and leaving a legacy.
An inheritance does not necessarily mean waiting for someone to die
The traditional view of an inheritance is relatively straightforward.
A parent dies, their assets are dealt with under their estate plan, and their children or other beneficiaries receive the proceeds.
But today’s intergenerational wealth transfer is broader than that.
Research published by the Australian Institute of Family Studies (AIFS) in September 2026 identifies a wide range of ways in which Australian families transfer wealth. These include gifts, loans, inheritances, assistance with housing costs, co-residence, care arrangements and other forms of financial support.
For example, (grand/)parents may help an adult child:
- save a deposit for a first home;
- meet education costs;
- establish a business;
- manage a period of unemployment or financial difficulty;
- renovate a home;
- provide childcare or accommodation; or
- deal with other significant life expenses.
This means some wealth that might once have been inherited later in life is now being transferred earlier.
For more on the challenges of supporting younger family members with housing, see our article on Housing market help for Children or Grandchildren.
The rise of the “living (‘warm’) inheritance”
There can be a significant difference between receiving $100,000 when you are 35 and receiving $100,000 when you are 65.
An inheritance received later in life may still be valuable. However, financial assistance received earlier can potentially help someone buy a home, reduce debt, undertake education or establish financial security at a time when those decisions can have a major impact on their future.
AIFS notes that inheritances often arrive after major decisions about housing, education and family formation have already been made. By contrast, earlier gifts and other forms of family support can have a more immediate impact on housing, education, employment and financial security.
This is sometimes described as a “warm” inheritance – providing financial support while the giver is still alive and able to see the benefit it provides.
For parents and grandparents, this can be very rewarding. Rather than leaving everything to be distributed later, they can see how their wealth helps the next generation today.
Gifting wealth requires careful thought
Early transfers can be beneficial, but they can also create unintended problems.
AIFS’ latest research highlights an important issue: families do not always clearly distinguish between a gift and a loan. Financial assistance may be arranged informally, particularly when parents help children purchase a home.
For example, parents may provide $200,000 towards a child’s home without formally documenting whether the money is:
- an outright gift;
- a loan to be repaid;
- an advance on the child’s eventual inheritance; or
- subject to some other family arrangement.
Years later, circumstances may have changed. Relationships may have broken down, a marriage may have ended, or the parents’ financial position may have deteriorated.
What seemed simple at the time can become complicated.
Clear communication and appropriate legal and financial advice can help reduce the potential for misunderstandings. Our article, Estate Planning and family loans, explores how undocumented arrangements between family members can create difficulties and why clear terms matter.
You do not have to leave everything to your family
The great wealth transfer is also prompting greater discussion about philanthropy.
JBWere’s Bequest Report estimates that only a small proportion of Australian inheritances currently goes to charitable and other purpose-driven organisations. It suggests that the coming transfer of wealth provides an opportunity for Australians to consider charitable giving as part of their legacy.
For some people, their legacy may therefore include a combination of:
personal enjoyment + family + philanthropy.
A lifetime gift to a charity can also allow you to see the benefit of your contribution rather than leaving the entire gift to be made after your death.
Our article on Philanthropy details several ways in which your largesse can be made available to those you seek to benefit.
Superannuation can become an inheritance
Superannuation is likely to be an important part of the story.
Many Australians enter retirement with substantial superannuation savings. As Australia’s superannuation system has matured, more Australians are entering retirement with substantial accumulated savings. While these savings are intended primarily to help fund retirement, some retirees do not spend all their super. While these savings are intended primarily to help fund retirement, some retirees do not spend all their super.
Instead, they continue to draw income conservatively and retain a significant balance throughout retirement.
Over time, these retained balances are likely to become an increasingly important source of wealth for the next generation. That is not necessarily a bad outcome. Leaving an inheritance can be an important personal objective.
Our article, Superannuation and Estate Planning, explains why superannuation does not automatically form part of your estate and why beneficiary nominations deserve careful attention.
It is worth considering whether you are spending less during retirement than you could comfortably afford simply because you want to preserve an inheritance (that on reflection, you may not really be able to afford).
There can be a significant difference between having enough to leave an inheritance and having more than you need because you are reluctant to spend your wealth.
Downsizing can change the eventual inheritance
The family home can represent a significant proportion of an Australian retiree’s wealth.
Some retirees choose to remain in their long-term family home. Others eventually decide that a smaller, more manageable property better suits their lifestyle.
Downsizing can release capital that may then be used to supplement retirement income, fund lifestyle goals or provide financial assistance to family members.
In this way, a property that might otherwise have been inherited later can instead contribute to the owner’s financial wellbeing during retirement.
However, downsizing decisions need to consider more than the sale price of the existing home. Moving costs, the cost of the replacement property, Centrelink considerations, superannuation rules and future housing needs can all be relevant.
Blended families make planning even more important
Intergenerational wealth planning can become more complicated where there are second marriages, blended families or children with significantly different financial circumstances.
Parents may want to provide equal amounts to their children. Alternatively, they may believe that a child who has received substantial assistance during their lifetime has already received part of their intended inheritance.
There may also be different needs between children.
One child may be financially secure, while another may need substantial assistance to buy a home or manage a disability or other circumstances.
These decisions are personal. There is no single definition of a “fair” inheritance.
The important point is to make your intentions clear and ensure that your estate plan reflects them.
Our article, Protect your estate from common mistakes, provides further information about protecting your intentions and planning for the transfer of wealth.
Start with what you want your wealth to achieve
The coming transfer of wealth between generations is sometimes described as a once-in-a-generation event.
The numbers certainly justify the description.
But for individual families, the important question is not whether Australia will transfer trillions of dollars.
It is:
What do you want your wealth to achieve for you and the people who matter to you?
You may want to –
- enjoy more of your wealth during retirement,
- help your children buy a home,
- support grandchildren,
- contribute to charitable causes, or
- leave a financial legacy for your family.
You may want to do several of these things.
The earlier you consider your objectives, the more choices you are likely to have.
A well-considered intergenerational wealth strategy can help you balance your own financial security with the desire to provide meaningful support to others.
After all, wealth is not simply something to accumulate.
It is a resource that can provide security, opportunities and enjoyment – both during your lifetime and for the generations that follow.
The information in this article is general in nature. Individual circumstances differ, and professional financial advice, tax and legal advice should be obtained before making –
- significant gifts,
- changes to retirement strategies, or
- changes to an estate plan.
How Continuum Financial Planners advice can help –
The experienced team of financial planners and advisers at ContinuumFP, work with several families to develop wealth management strategies for those accumulating wealth – and for their beneficiaries getting prepared to deal with gifted/ inherited wealth.
Whether it is through personal advice and/ or family ‘conferences’, we can guide you through all of the matters for you to consider, whether as a donor, or a recipient. To meet with one of our team, arrange an appointment by –
- Phoning our office, on 07-34213456, or
- At your convenience, use the linked Book A Meeting facility.
Sources and further reading
The estimates and research discussed in this article draw particularly on:
- Australian Institute of Family Studies, Intergenerational Wealth Transfers in Contemporary Australia (2026) – research into gifts, loans, inheritances, housing assistance, family arrangements and other forms of intergenerational support.
- Productivity Commission, Wealth Transfers and their Economic Effects (2021) – comprehensive Australian research into the scale, nature and potential future effects of wealth transfers.
- JBWere, The Bequest Report – including its estimate of approximately $5.4 trillion in inheritances over 20 years.
- Australian Treasury, 2026 Intergenerational Report – Australia’s long-term demographic, economic and intergenerational outlook.
(This article was first posted by us in October 2026.)