TRIBECA

Navigating the ‘Great Wealth Transfer’ for successful families

Contents

The 'Great Wealth Transfer'

Much has been written about Australia’s ‘Great Wealth Transfer’. Over the next 25 years, Australian families will transfer unprecedented levels of wealth between generations – an estimated $5.4 trillion in assets – reshaping not only household balance sheets but also the financial lives of children, grandchildren and future generations.

The headlines tend to focus on the size of the transfer. But for many successful families, the real story isn’t the money – it’s the complexity.

For families with significant wealth, succession is rarely as simple as passing on a portfolio or distributing assets through a Will. More often, wealth has been accumulated over decades through businesses, property, investments and carefully constructed entities. It sits across family trusts, companies, self-managed super funds and personal ownership. It may involve adult children with different aspirations, philanthropic ambitions or businesses that are still creating wealth rather than preparing to distribute it.

The challenge isn’t simply who inherits what. It’s how to preserve family harmony, minimise unnecessary tax, protect assets, maintain flexibility and ensure wealth continues to serve future generations.

For many affluent families, this is where financial advice becomes less about managing investments and more about helping families make informed decisions across generations.

So if you have a seat at the family boardroom table, what are the key factors to consider in navigating Australia’s Great Wealth Transfer?

Complexity grows faster than wealth

A family that owns a successful business, an SMSF, several investment properties and a family trust already has multiple moving parts. Add adult children, changing tax rules, retirement planning and estate planning, and seemingly straightforward decisions become deeply interconnected.

Should the business be sold before retirement or transferred to the next generation? Should investment assets remain inside existing trusts or be restructured, and what are the tax implications? Who should become appointer of the family trust? What happens if one child works in the business while another does not?

These aren’t simply technical questions. They are strategic family decisions that require the right expertise around the table. Increasingly, families are looking for an advisor who can help coordinate these conversations – working alongside accountants and lawyers to ensure each decision supports the family’s broader objectives rather than optimising one issue in isolation.

Asking the right questions

The most important conversations for families with significant wealth shouldn’t be around investments and transactions. They should be around people.

Who will lead the family business if the founder steps away? How should decisions be made when siblings have different views? When is the right time to involve the next generation? Who has the authority to make decisions if family dynamics change?

These questions rarely have purely technical answers. They require judgement, perspective and the ability to navigate competing priorities while maintaining family relationships. This is where a trusted advisor becomes a critical asset.

Rather than simply producing advice documents or implementing investment strategies, advisors can play a far more important role in providing objective viewpoints when emotions are high, facilitating difficult conversations when required, and helping families make decisions that balance financial outcomes with family objectives.

In these situations advisors are valued not because they have all the answers, but because they ask the right questions.

Estate planning vs succession planning

These two terms are often used interchangeably, but they solve very different problems.

Estate planning talks more to answering the technical questions. How are assets distributed? Is there a valid Will? Are trusts appropriately structured? Who acts as executor or trustee?

Family succession planning asks a much broader set of questions. Who will lead the family? How will responsibility be shared? How are family values preserved alongside family wealth?

One deals with the transfer of assets. The other deals with the transfer of responsibility. Both are equally important and come with varying levels of complexity, requiring a blend of expert knowledge with human-centred acumen to lead families professionally and sensitively through this process.

Managing family complexity and dynamics

Modern families are increasingly complex. Second marriages, de facto relationships and children from previous relationships are all considerations that need to be factored in when managing the transfer of family wealth.

Parents naturally want to provide fairly for everyone. But “fair” and “equal” are rarely the same thing. One child may have already received financial assistance. Another may have contributed years to the family business. Without careful planning, these differences can create tension that lasts for generations.

Experienced advisors can help facilitate conversations that families often find difficult to start themselves, ensuring financial decisions are aligned with family values as well as legal structures.

And then there’s balancing how different generations view wealth.

The generation creating wealth often values security, discipline and preservation. The next generation may be more focused on opportunity, entrepreneurship or philanthropy.

Neither perspective is necessarily right or wrong. But when expectations aren’t discussed openly, misunderstandings can develop quickly. By having meaningful and productive conversations long before wealth changes hands, these discussions help establish shared goals, clarify responsibilities and prepare future decision-makers for the stewardship of family wealth.

As an independent voice, a financial advisor can help bridge generational perspectives, educate younger family members and create confidence that decisions are being made in the interest of the family as a whole.

Keeping up with constant change

Many of the structures established to build wealth were never designed to transfer it. A family trust established 25 years ago may still hold substantial investments. A business originally intended to remain in the family may now be attracting acquisition interest. An SMSF established for retirement may now hold several million dollars alongside evolving superannuation rules.

The strategy that created wealth is not necessarily the strategy that will preserve it. Financial advice plays an important role in helping families understand the ever-changing legislative landscape and evaluate the trade-offs.

Superannuation is a prime example, particularly around changes surrounding the additional tax applying to earnings attributable to balances above $3 million (Division 296). For years, maximising superannuation balances was an obvious strategy. But now the equation is not as clear, with other options such as testamentary trusts, corporate structures and personal investments becoming a greater part of considerations alongside super as a multi-generational wealth strategy.

It highlights the importance of continually challenging whether today’s structures still makes sense under tomorrow’s rules, and involving the next generation in the planning as soon as possible so they are equipped to make informed decisions for the long-term.

Keeping up with constant change should therefore go well beyond balance sheets. Successful families need to be acutely aware of how wealth will be transferred through generations, and have structures in place to govern and protect it.

This may involve documenting family values, creating decision-making frameworks, clarifying roles within trusts and companies, educating the next generation, or establishing regular family meetings around financial matters.

Good governance creates confidence. And more importantly, it reduces the likelihood that future decisions become emotional, reactive or divisive.

Advisors can help families build these governance frameworks – not by making decisions for them – but by providing structure, facilitating conversations and ensuring each generation understands both the opportunities and responsibilities that accompany wealth.

The question of legacy

One of the key questions framing the transfer of wealth is not ‘how much’ should we leave behind but ‘what’ should we leave behind.

For some families, the most enduring part of their legacy may not be the wealth their children inherit, but the values, purpose and sense of responsibility that travel with it.

A lifetime of building wealth can create an opportunity to do more than provide financial security for children and grandchildren. It can support causes that matter to the family, strengthen communities and give the next generation an opportunity to understand what the family’s wealth represents.

This is where philanthropy becomes an important part of the conversation.

Philanthropy can provide a powerful mechanism for making that legacy tangible. It can give parents and grandparents an opportunity to involve the next generation in decisions about where wealth should go and what impact the family wants to have.

That conversation can start well before an inheritance.

Again, a trusted advisor can help a family understand the options, bring the right specialists together and create a framework that allows philanthropy to evolve across generations.

Women and wealth transfer

Of the $5.4 trillion that will be transferred through generations over the next two decades, JBWere and CoreData estimate more than 65% of this wealth will land into the hands of women.

It also highlighted that at the point of wealth transfer, the oldest daughter is the family member most likely to take control of the family finances, and is also 50% more likely to shoulder responsibility for managing the family estate.

This creates an important consideration for families planning their succession. The person who ultimately manages the family’s wealth may not be the person who originally built it.

With the number of wealthy women in Australia steadily growing over the past decade (close to twice the growth in the number of new women millionaires compared to men) – source?, many women will be well positioned to handle the decisions and responsibility that comes with managing significant wealth.

For some women, however, that transition may not be as smooth if they have been less directly involved in the family’s financial affairs, focused on family responsibilities, or simply relied on another family member or advisor to take the lead on financial decisions.

Then, almost overnight, they may find themselves responsible for substantial investment portfolios, trusts, companies, property, superannuation and complex estate structures.

Here the challenge isn’t a lack of capability. It is often a lack of preparation.

Women (or anyone) who may eventually take responsibility for family wealth should understand how the family’s assets are structured, why particular decisions have been made, who has authority to make them and what the family’s broader objectives are.

They need the confidence to ask questions, challenge assumptions and make decisions in their own right.

This is particularly important when the family wealth includes operating businesses, discretionary trusts, significant superannuation balances or complex ownership structures. Understanding what you own is very different from understanding how it works.

For advisors, this creates a responsibility to engage the next generation before they inherit – not simply after.

Being financially prepared and capable

This leads to the broader question of financial capability.

The Big Lift research from Deloitte Access Economics and Iress found that 59% of Australians have low financial capability. This means that as we sit on the cusp of the greatest transfer of wealth in Australia’s history, many individuals and families will be underprepared.

The fact is wealth can be transferred overnight. But financial confidence, judgement and responsibility cannot.

The implications are significant.

We shouldn’t assume that because someone is inheriting substantial wealth, they automatically have the skills or experience to manage it. And we shouldn’t confuse financial capability with financial intelligence.

A successful businessperson, professional or parent may be highly capable in every other aspect of life and still feel uncomfortable making decisions about investments, trusts, tax or estate structures.

Good advice can bridge that gap. Not by taking control away, but by building the confidence to take control. The Big Lift research supports this, finding that 57% of Australians report more confident decision-making after receiving financial education or advice.

For families, that may be one of the most valuable legacies they can provide the next generation: not simply financial assets, but the knowledge, relationships and confidence to take on this responsibility.

A coordinated and united approach

Given the complexity and competing challenges that often face successful families, having one professional provide a complete solution is extremely difficult. And inefficient.

A decision to sell a business influences investment strategy. Investment structures affect estate planning. Estate planning shapes tax outcomes. Tax outcomes influence family distributions.

Every decision has flow on consequences.

The best outcomes come when advisors, accountants and lawyers work together, aligned around the same goals and strategy. Think of it as the difference between a rowing crew pulling in unison and a group of talented individuals each rowing in their own direction.

A coordinated strategy by trusted experts can assist families to not only optimise today’s position, but create a framework that remains resilient as legislation changes, family circumstances evolve and wealth passes between generations.

Transferring wealth and knowledge is where the true value lies

Australia’s great wealth transfer will create enormous financial movement; and opportunity for families with significant wealth. The ones who approach it with careful planning, collaboration and shared responsibility – and take a long-term view rather than consider it as a moment in time – will be well placed to navigate it successfully.

It should be seen as a process and opportunity for preparing people, establishing solid and clear governance, and to make informed and thoughtful decisions that will shape a family’s future for generations.

Financial advice can play a central role in this extending well beyond investments and portfolios. A trusted advisor around the boardroom table can provide clarity amidst complexity and objectivity to emotion, helping families make confident decisions for preserving wealth – and critically – the relationships and values that underpin it.

While assets can be easily transferred with documents, enduring wealth is built through preparation, structure and mutual understanding.

This is where the real value of advice lies. Not simply in managing wealth, but in helping families create a legacy that lasts well beyond the next generation.

Links & sources:

Ready when
you are

Want to know more about Tribeca and the value we can provide in supporting your private wealth management?

Next step is to arrange a call with with Rob or Rachael. You can do this by contacting our office on 1300 388 285 or emailing our team.

Scroll to Top

TRIBECA