In this edition of Exchange, we take a closer look at managing intergenerational wealth transfer – with hundreds of billions worth of inheritances expected in the coming years, and chat with Warren Krass, our new family law specialist.
While a new financial year is always a good time to double-check your financial arrangements, this year is especially important. With a newly elected Federal Government, global uncertainty, inflation and superannuation changes to name a few, it may be worth reassessing your medium to long-term objectives. Please reach out to your adviser if you have any questions or concerns.
Navigating the challenges of building a family legacy
Having worked hard to build wealth over your career, it’s natural to look to the future, especially if you are considering retirement or reducing your workload. While it may be several years or even decades down the track, the key to successful intergenerational wealth is forward planning.
Australia’s Productivity Commission published their first official study of intergeneration wealth transfer in Australia and it makes for interesting reading. While a lot is said about the wealth of so-called baby boomers (those born from 1946 to 1964), the scale of the numbers may surprise you.
Driven by record property prices and superannuation returns, inheritances and gifts to younger generations are forecast to exceed $224 billion per year by 2050, creating a $3.5 trillion windfall on the way primarily for adult children.
Having helped many clients navigate estate planning and inheritances, we have developed a deep understanding of the challenges and opportunities. It is ultimately a financial, accounting and legal puzzle, however at the heart of intergenerational wealth transfer are complex family dynamics, personal relationships, sentimentality and strong emotions.
While the intention is to create a meaningful legacy and set up your family for a prosperous future, conflict and chaos are never far away when dealing with money and human relationships. The last thing you want is to put a wedge in the family with well-intentioned, but unclear, arrangements.
Some of the common questions we help clients address include:
- How can you manage inheritances and wills without causing conflict or resentment?
- When is the best time, or life stage, to unlock wealth for your children?
- How do you go about developing an equitable arrangement? When, and how, do you communicate this?
- How do you protect your assets from questionable in-laws or partners?
- How can you divide a sentimental asset like a family farm or large property?
- How do you manage ongoing business interests if you want to step back over time?
- What lifestyle do you want in retirement? What is the plan when extra care is needed?
- Who should you nominate as beneficiaries? What’s the best way to set this up?
- Do you need a lawyer, an accountant, a financial planner or all three? And when?
Complementing the financial and accounting elements, a central piece of the puzzle is having a lawyer you can trust. You need a team that understands the intricacies of family dynamics as well as the ins and outs of family law.
Introducing Warren Krass – family law specialist
Warren Krass
Lawyer/Public Notary
As we covered in our last newsletter, it was exciting to officially welcome accounting and legal firm Cohen and Krass into the Financial Decisions family. This acquisition fulfils our long-held ambition to offer one-stop financial planning, accounting and legal services, as well as a complete family office solution.
Joining our senior leadership team is experienced Solicitor, Warren Krass (Supreme Court admission in 1980, Bachelor of Laws, additional qualifications in estate planning and Public Notary). Warren co-founded Cohen & Krass in 2002 following a corporate career that spanned over 20 years.
Warren is motivated by assessing clients’ most puzzling challenges, helping them understand the intricacies of the situation and developing a sound legal and financial solution.
“Financial Decisions was an ideal cultural fit with Cohen and Krass, and their capabilities help us deliver end-to-end family office solutions. Both firms have always taken a long-term approach to legal advice with client partnerships that often span multiple generations and family members. Many of our clients become friends and friends become clients.”
Warren has vast experience managing the intergenerational challenge of family farms, large estates, diverse portfolios and ongoing business interests.
“With complex properties or business interests, it’s never cut and dried. To avoid complications, it’s important to plan carefully for the long-term transition, management succession and future distribution of these assets.”
“Our primary goal is always to find a harmonious solution that avoids conflict, but we can also represent your interests if any legal issues do arise.”
No matter what the question or issue, Financial Decisions can help support families through the journey of setting up the right processes and documentation, as well as executing contracts and navigating any conflicts such as court challenges.
Family finances, accounting and law under one roof
Now with the triple disciplines of financial planning, accounting and legal services, Financial Decisions is well equipped to help you navigate the complex world of family finances from super and financial planning, through to estate planning and navigating disputes.
Whether you’re building your career, growing a business, consolidating your portfolio or considering your legacy, our breadth of services under one roof means we can meet your evolving needs.
Disclaimer: This publication has been compiled by Financial Decisions (AFSL/ACL Number 341678). Past performance is not a reliable indicator of future performance. While every effort has been taken to ensure that the assumptions on which the outlooks given in this publication are based on reasonable data, the outlooks may be based on incorrect assumptions or may not take into account known or unknown risk and uncertainties. Material contained in this publication is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The information and any advice in this publication do not take into account your personal objectives, financial situation or needs. Therefore you should consider its appropriateness having regard to these factors before acting on it. While the information contained in this publication is based on information obtained from sources believed to be reliable, it has not been independently verified. To the maximum extent permitted by law: (a) no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up-to-date or fit for any purpose; and (b) Financial Decisions nor its employees are in any way liable to you (including for negligence) in respect of any reliance upon such information or advice. June 2022
Contact: Financial Decisions PO Box 484 Mona Vale NSW 1660, T 02 9997 4647, F 02 9997 7407