By Craig Keary, CEO of Selfwealth
In the third chapter of this six-part series with the Australian Shareholders’ Association, Craig Keary, CEO of Selfwealth, unpacks the intergenerational wealth shift and why it matters to all of us. To do this, a new framework is being introduced: ‘FAMILY.’ Within this simple acronym are the six key elements considered crucial to a successful intergenerational wealth transfer. The ‘M’ represents multigenerational financial planning – a crucial strategy to ensure that wealth is not only preserved but also effectively transferred and managed across generations.
Understanding the different needs of each generation
Each generation within a family has distinct financial priorities and perspectives. Baby boomers, who often control the majority of family wealth, may focus on securing a comfortable retirement and a smooth transition of assets. Generation X and elder Millennials, often balancing careers, mortgages, and raising children, may prioritise financial growth and debt management. Meanwhile, younger generations may be more likely to seek investment opportunities, education, and sustainable wealth-building strategies. Every family is different, with unique priorities across their lifetimes.
Harmonising these differing priorities requires a structured, inclusive approach to financial planning. Open family communication, guided by professional advisers, can help align goals and create a unified wealth management strategy that benefits all generations.
The importance of multigenerational planning
While wealth transfer presents an opportunity for financial security, it also brings challenges. Without proper planning, inheritances can be quickly depleted or mismanaged. A structured approach helps families maintain financial stability while fostering responsible wealth stewardship among younger generations.
Multigenerational financial planning is not just about distributing assets; it’s about equipping each generation with the knowledge, tools, and strategies to manage and grow wealth effectively. It involves succession planning, tax considerations, estate structuring and intergenerational financial education.
Key considerations for effective multigenerational planning
- Estate and succession planning
A well-structured estate plan – including wills, trusts and powers of attorney – ensures assets are distributed according to your wishes while minimising legal complications. For business owners, succession planning is essential to maintain continuity and safeguard the family’s financial legacy. Legal experts play a vital role in structuring these plans to minimise disputes and protect assets.
2. Tax efficiency and superannuation planning
Australia’s tax laws can impact wealth transfer, with potential capital gains tax (CGT) implications and superannuation rules affecting inherited assets. Structuring wealth through family trusts and superannuation funds has the potential to enhance tax efficiency for some families. Government policies and incentives, such as concessional superannuation tax rates, can support long-term wealth preservation if effectively leveraged. Seeking professional advice is important in this regard and you should consider your own circumstances.
3. Open family communication
Open discussions about financial goals and values can help unify the family’s financial vision. Transparency helps avoid disputes and aligns financial decisions with long-term objectives. Family meetings, facilitated by financial professionals, are one way to create a structured environment for these critical conversations. This can and should continue informally in conversations around the dinner table, keeping communication open and regular.
4. Philanthropy and legacy planning
For many families, leaving a legacy goes beyond financial assets. Structuring charitable giving through family foundations or donor-advised funds can help instil philanthropic values while creating lasting social impact. Legal and financial professionals can assist in establishing tax-efficient charitable structures to maximise benefits.
The role of professionals in multigenerational planning
Navigating complex financial structures requires the expertise of financial advisers, estate planners, and tax specialists. These professionals provide tailored strategies to optimise wealth transfer, mitigate tax liabilities, and ensure compliance with regulatory requirements.
A holistic approach to family wealth
Multigenerational financial planning is about more than just preserving money – it’s about financial security and empowering future generations with the knowledge and structures needed to sustain wealth. By taking a proactive and strategic approach, Australian families can navigate the complexities of intergenerational wealth transfer with confidence.
In the next part of our FAMILY framework series, we’ll explore ‘I’ – investment strategies – to help families grow and protect wealth effectively.
The information has been prepared without considering the objectives, financial situation, or needs of any individual. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to the individual’s objectives, financial situation or needs, and, if necessary, seek appropriate professional advice.
This article is brought to you by Selfwealth, a proud partner of the Australian Shareholders’ Association.
