In the past, Australians wouldn’t get an inheritance until their parents passed away. But increasing numbers of elderly Australians are gifting their children their inheritance before they pass away, a practice which money experts say could put the financial futures of generous seniors at risk.
Some seniors are motivated by a desire to help their children when they need it most, like when they’re saving for their first property or starting a family.
“That way they can see the benefits first hand and in some cases offer advice on how to invest the money so it provides ongoing value,” Adrian Frinsdorf, William Buck’s director of wealth advisory told news.com.au.
“As grandparents become increasingly involved as carers in the lives of their grandchildren, I’m also seeing more early inheritance funds being used to pay for secondary and tertiary education.”
However, some other older Australians reportedly feel pressured by their children to cough up the cash early. Known as Early Inheritance Syndrome, this type of elder abuse is a “reasonably regular occurrence,” according to Joshua Crowther, a wills and estates law specialist at Stacks Law Firm. He hopes Australia will introduce laws dealing with elder financial abuse, like California and some other American states have, to combat the problem.
While it’s only natural to want to provide for your children, it should never come at the expense of your own lifestyle. You must be confident your generosity won’t compromise your own future. Your gift could also have unexpected tax consequences for you and your child. If you’re considering giving your kids their inheritance early, speak to Chase Edwards first.
Our financial health checks are free and there’s no obligation for you to use our services. They’ll offer an impartial assessment of your finances and whether you can really afford to help your kids. If it’s not the right time for you to give your kids their inheritance now, we can help you devise strategies to increase your wealth and achieve that financial goal. Call us on 1300 854 833 to set up an appointment with our friendly money experts.