“Don’t Rely on the Old Folks Money” was the title of the article on ground breaking research by Simon Kelly and Ann Harding published in the Elder Law Review nearly ten years ago ([2006] ElderLawRw5).
The research in the article, from the University of Canberra’s National Centre for Social and Economic Modelling, found that inheritance payouts were shrinking rapidly. Only about 1.4% of adults received an inheritance in any given year with half of these inheritances received from parents less than $20,000 and with only 18% worth more than $100,000. The average age of the beneficiary was found to be approximately 48 years of age with such inheritance likely to be consumed well before retirement of the beneficiary.
It is difficult to assess whether this trend has changed since this study, as there has not been any research undertaken of a similar nature. From an observational point of view it would appear that the situation remains much the same. That is, the older generation are using their superannuation to support themselves in retirement, leaving less inheritances for their children.
This places increasing importance on the younger generations and their need to plan for their financial future, without reliance on an inheritance.
One of the important factors in this planning is ensuring that your Will is up to date and reflects your current circumstances. If you have married or divorced and this is not reflected in your current Will, it may lead to part of your Will being revoked.
With blended families part of everyday life it is also worthwhile considering a binding financial agreement between you and your spouse or partner. This can ensure that both you and your spouse or partner, are protected in the event that the relationship breaks down as well as protecting any inheritance you wish to leave for your children.
Another area that needs to be considered is your superannuation and whether it will be enough to support you when you wish to retire. In addition, you need to consider whether your superannuation will cover you in the event that you suffer from a permanent or temporary disability and are unable to continue working.
Superannuation funds also allow you the option of making binding nominations for the intended beneficiaries of the money in the fund when you die. If no binding nomination is made, then the Trustee of your superannuation fund is able to distribute the funds to whomever they believe is most entitled.
There are many things to consider in these times of falling inheritance and longer retirement periods. To ensure that you are not affected you need to seek advice on Estate Planning from an expert Wills and Estates lawyer.
Graeme Heckenberg is an expert Wills & Estates lawyer and will be able to guide advise you in your Estate Planning. If you are living on the Northern Beaches and surrounding Peninsula and need expert advice in a Will & Estate matter, call for a consultation.
Call today for a an appointment closer to home on 9221 0341
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