Blog What legacy do you want to leave behind (and when)? May 1, 2017 RSS

What legacy do you want to leave behind (and when)?


Have you thought much about what type of legacy you want to leave behind?

If you have inherited money or property then there’s a higher chance you have. For many, an inheritance comes as an unexpected surprise; something that was never going to be relied upon. Receiving such a gift, big or small, will start to promote ideas of one day passing on a similar amount (or more) to others.

For those that haven’t yet received an inheritance, this entire concept is not only foreign, but a little uncomfortable – because it’s a conversation about death which most people don’t want to talk about it.

So let’s not talk about death. Not because we want to avoid it but because the concept of a legacy is starting to change from being an afterlife event to a rewarding one.

According to the dictionary, a legacy, is an amount of money or property left to someone in a will. However I can see a trend starting over the coming decades where Baby Boomers, after downsizing may start to gifting more assets sooner to their kids?

Why? Here are a few theories…

  • Life is far more competitive these days, especially in Sydney and Melbourne. Grandparents, more and more, if they have enough money are helping to pay for private school fees.
  • Grandparents don’t want to have to travel an hour or more to see their grandkids, so are helping their kids buy property sooner to ensure that they can get ahead sooner.
  • Grandparents, after a downsize may consider gifting money to the kids to help reduce home loan debt sooner, which in turn reduces pressure on their kids who in turn can possibly spend a bit more time, energy and attention on the grandkids instead of work.
  • Private Ancillary Funds (PAF’s) – your own personal charity – may become more popular as a way of teaching our kids how to consistently take care of others in need of help.
  • The younger generations are perceived to want instant gratification; what if some of that rubs off on the older generations and we all start to want to see such rewards before we die. I’m not suggesting that we will go searching for likes on Facebook for having done something sooner, but our kids mean everything to us. Taking pressure off them sooner, if it is clear they are going to inherit money one day can be a rewarding and fulfilling experience.

From a technical point of view, if you have particular ideas on how or what type of legacy you want to leave behind, then make sure your Will is up to date.

From a practical point of view, start thinking about what type of legacy you might want to leave behind before you die, but chat to your financial adviser about what options are available to you before making any promises!

You obviously don’t want to be in a position where you give away assets that one day you need to call back from your kids because you gave away too much.

But there are many different ways to structure the giving. It doesn’t have to be a lump sum, it can be structured over time. There can be tax effective ways of structuring the process and there are lessons to be learned from those that have already done this.

A valuable aspect of working with an experienced financial adviser that is often overlooked are the experiences of other clients that have done or doing what you may be about to do. There are many options to consider so reach out to your adviser to discuss. If your adviser is uncomfortable with talking about death…might be time to reach out for a second opinion…!