Giving While Living: A Legacy That Lasts

Anthony Keane recently wrote an excellent piece in The Australian on the rise of early inheritances – a trend reshaping how families approach wealth transfer.

I was fortunate to contribute to the article, and I’d like to expand on the conversation with a few practical insights for families considering ‘giving while living’.

Why Are Families Fast-Tracking Wealth Transfers?

The traditional model of passing on wealth after death is shifting. We’re seeing more families act sooner, and the reasons are practical:

• Property prices and timing realities: It’s tougher than ever to get into the property market, so many parents are choosing to help their children buy a house now, rather than leave a lump sum decades down the track.
• Business succession without the scramble: For family businesses, the smoothest transitions happen gradually. Parents are starting the handover earlier so the next generation can learn while still under the guidance of mum and dad.
• Super Death Benefits Tax: Australia doesn’t have an inheritance tax, but superannuation death benefits can still attract tax – up to 17% to 32%, depending on who receives them. Adult children who aren’t financially dependent may face the higher rate.
• The Transfer Balance Cap also plays a role. It limits how much of your super can be moved into the tax-free retirement phase – currently $2 million. Anything above that stays in the accumulation phase, where earnings are taxed at 15%. Families with large balances are increasingly looking to move excess funds into more flexible structures earlier, before the cap becomes a constraint.

Potential Benefits of Early Wealth Transfer

Early inheritance isn’t just about generosity – it’s about strategy. Done well, it can:

• Support intergenerational planning with purpose: Parents want their wealth to do what it’s meant to do; whether that’s enabling home ownership, supporting education, or sustaining a family business.
• Reduce future conflict: Clearly documented early transfers reduce uncertainty and resentment later.
• Leverage superannuation opportunities: For parents with large super balances, moving excess funds out and re-contributing for adult children can be a smart move. It gives the kids a tax deduction on concessional contributions and keeps the capital invested for the long term.

Key Considerations Before Acting

Before making any decisions, families should:

• Start with “what’s enough” for you: Ensure your own retirement, health care and lifestyle are secure before committing to early transfers.
• Write it down and keep it tidy: Good paperwork prevents bad blood. Update wills, trust deeds, shareholder agreements and document loans or gifts properly.
• Communicate and build capability: Money without mindset doesn’t stick. Bring the family into the process and lift financial literacy early so everyone understands the plan.

Final Thoughts

Anthony’s article shines a light on an important shift in how families think about wealth. At Perks Private Wealth, we help families navigate these decisions with clarity and confidence; keeping families united and legacies protected for generations to come.

If you’re considering early wealth transfer or succession planning, now is the time to start the conversation – with structure, purpose, and the right advice.