Estate Planning – How Australians can build and protect generational wealth

Estate planning goes beyond just preparing a will – it's about wealth and assets being protected, preserved, and passed down to your loved ones the way you intended. In today’s challenging economic climate of rising house prices and the increasing cost of living, securing the financial futures of your loved ones has never been more important.

"Making effective decisions today can ensure that significant financial goals are met according to each person's wishes." – Grant Hackett OAM, Chief Executive Officer at Generation Life

Australians are now supporting their children’s property dreams and more

Recent research conducted by Generation Life reveals 63% of young Australians are challenged by rising house prices and over 4 in 5 state the high cost of living as a factor impacting their wealth goals.

It’s also estimated that the average first home buyer needs at least 12 years to save for a deposit for the average unit and 16 years for the average house in Australia.¹

With these factors in mind, high-net-worth parents, those under 50 with $1m or more in investable assets are now shifting their priorities to supporting their children financially, particularly with purchasing their first home (80%) and having enough to leave behind an inheritance (84%).

Similarly, older high-net-worth Australians are planning to support their children across other specific financial goals including funding future weddings (43%). This also extends beyond their own children to grandchildren, with 40% saying that paying for their children’s and grandchildren’s school fees is a priority.

The powerful role of investment bonds in estate planning

Beyond the role of investment bonds to accumulate wealth, Generation Life Investment Bonds serve as an invaluable tool for estate and succession planning. With 74% of claims made against estates being successfully challenged in Australia, investment bonds offer an advantage.² They can be structured as non-estate assets, allowing beneficiaries to be nominated and can bypass probate, whilst still passing on wealth with certainty and confidence.

Generation Life Investment Bonds provide a streamlined approach to wealth transfer that can minimise delays and the administrative burden typically associated with settling estates. They also provide the ability to transfer ownership to an intended recipient tax-free on a chosen date, either before or after the investment bond owner's date of death, with options to restrict how recipients can access the funds.

The flexibility to control when and how nominated beneficiaries receive inheritances, with the added layer of protection in the event of bankruptcy of the investment bond owner are just some of the other reasons for investment bonds increasing popularity as succession tools.

"We envisage a future when more trust fund kids become investment bond kids, set up by their parents to achieve specific goals in a tax-effective way that will help them live happy, fulfilled lives." – Felipe Araujo, Executive Director and General Manager at Generation Life

To find out more about how investment bonds can be as an unrivalled estate planning tool, view our estate planning guide here.

Download our latest research

Generation Life recently launched the Not Tomorrow’s Problem Guide – a comprehensive resource providing valuable insights into Australians' financial motivations, goals, and the barriers preventing them from achieving their financial dreams.

Uncover the latest data, gain insights from industry experts and explore innovative investment solutions designed for Australians at every life stage. If you're a financial adviser, download your copy today.

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_Footnotes:

_{1. Blackburn, T., 2023 ‘A marathon to mortgage: First Home Buyers Need More than a decade to save for a home’, https://www.finder.com.au/news/first-home-buyers-need-years-for-home-deposit, accessed on 7 November 2024}

_{2. (Percentage of successful claims, subject to claims not stated): Source: UNSW Law Journal, Estate Contestation in Australia: An Empirical Study Of A Year Of Case Law, 2015}

_Disclaimer

_{Generation Life Limited AFSL 225408 ABN 68 092 843 902 (Generation Life) is the product issuer. The information is general in nature and does not consider the investment objectives, financial situation or needs of any person. Generation Life excludes, to the maximum extent permitted by law, any liability (including negligence) that might arise from this information or any reliance on it. Past performance is not an indication of future performance. The product's Product Disclosure Statement (PDS) and Target Market Determination are available at http://genlife.com.au and should be considered in deciding whether to acquire, hold or dispose of the product.}