{"id":78408,"date":"2025-08-07T10:43:55","date_gmt":"2025-08-07T00:43:55","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=78408"},"modified":"2025-08-12T15:43:45","modified_gmt":"2025-08-12T05:43:45","slug":"complexities-of-generational-wealth-transfer-explored","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2025\/08\/07\/complexities-of-generational-wealth-transfer-explored\/","title":{"rendered":"Complexities of Generational Wealth Transfer Explored"},"content":{"rendered":"

While many parents want to support their children and grandchildren with cash gifts and loans, they also need financial security in their later years, says Marshall Ross<\/strong>, Partner Education Manager at Acenda<\/a>.<\/p>\n

Speaking during an online seminar on generational wealth transfer \u2013 $3 trillion is expected to pass from baby boomers to younger generations over the coming years \u2013 Ross touched on the legal risks involved in parents handing out cash to their kids, and noted that the bank of mum and dad is now the fifth-largest lender in the country with $35bn on loan.<\/p>\n

\"Marshall
Marshall Ross…intergenerational wealth transfer has been flipped.<\/figcaption><\/figure>\n

Parents are not just helping their children buy their first home, he said. They are also chipping in to pay for groceries, general bills, expenses, and grandchildren\u2019s education.<\/p>\n

Meanwhile, generous parents will need money for healthcare, living expenses, and aged care, meaning their good intentions could leave them short when their ability to earn money is long gone.<\/p>\n

\u201cAll of these complexities come with retirement and increased lifespans,\u201d he said. \u201cA lot of people don\u2019t expect their children to stop asking for money.\u201d<\/p>\n

Ross said 22% of parents expect to fund their children by cutting back on their own expenses, \u201c\u2026and that worries me\u201d.<\/p>\n

…A lot of people don\u2019t expect their children to stop asking for money…<\/p><\/blockquote>\n

\u201cTwo-thirds of them say they\u2019re risking financial hardship, or potentially feel like they\u2019re exposing themselves, by helping their children,\u201d said Ross.<\/p>\n

\u201cIn the past, it would be quite common for the accumulator \u2013 or the younger people \u2013 to look after their parents in retirement.<\/p>\n

\u201cWe\u2019re seeing that with the bank of mum and dad, intergenerational wealth transfer has been flipped \u2013 wealth is being transferred pre-death.\u201d<\/p>\n

He said this situation creates a lot of challenges that both generations aren\u2019t necessarily talking about, and could leave retirees exposed to financial risk from the unplanned transfer of wealth.<\/p>\n

Joining Ross on the panel were Pedro Marin Ramirez<\/strong>, MD\u00a0Marin Wealth<\/a>, Brad Monk<\/strong>, a Senior Financial Adviser at LifePath Financial Planning<\/a>, and Kate Kimmorley<\/strong>, Principal, Kimmorley Financial Management<\/a>.<\/p>\n

Kimmorley said protecting the asset pool is important because people are living longer, the cost of care is increasing, and parents don\u2019t want to become a burden to their children later in life.<\/p>\n

…understanding the granny flat rules is very important for a financial planner…<\/p><\/blockquote>\n

\u201cThat\u2019s if the kids are around to look after them,\u201d she said. \u201cBecause these days people move away, move overseas. Those are some of the big challenges we\u2019re seeing now, and the big discussions we are having with our older clients \u2013 not even older\u2026 sixties and seventies.\u201d<\/p>\n

Monk said three generations living in one house is something he\u2019s beginning to see more often.<\/p>\n

\"Brad
Brad Monk,
Senior Financial Adviser with LifePath Financial Planning.<\/figcaption><\/figure>\n

\u201cSo understanding the granny flat rules is very important for a financial planner who wants to specialise in that area,\u201d he said.<\/p>\n

He also raised concerns about loans to children, noting these can cause complications with Centrelink down the track, as well as when other problems arise.<\/p>\n

\u201cIt\u2019s very important for the older generation not to be so trusting of their kids,\u201d he said. \u201cThey\u2019re generally very generous \u2013 most of them \u2013 and have good hearts and good intentions. Sometimes we need to protect older people from themselves.\u201d<\/p>\n

Ramirez pointed to children asking their parents to guarantee bank loans \u2013 and the risks that can bring.<\/p>\n

\"Pedro
Pedro Marin Ramirez, MD, Marin Wealth.<\/figcaption><\/figure>\n

He said parents often don\u2019t understand what would happen to their house if a child stops meeting their financial commitments.<\/p>\n

\u201cThey also don\u2019t understand the gifting rules behind providing a portion of their wealth into the child\u2019s bank,\u201d he said.<\/p>\n

\u201cWhat happens if the parents die? What happens to that loan? How fast can you pay it? Will that affect their credit?<\/p>\n

\u201cAnd then we get more complicated structures, where the parents have a family trust. You can then invest using that family trust, and it could be intergenerational. So that\u2019s another benefit.\u201d<\/p>\n

Estate planning<\/strong><\/p>\n

Kimmorley said most of her firm\u2019s reviews include a discussion around estate planning.<\/p>\n

\u201cWe look at taxable and tax-free components in super, and we talk about testamentary trusts,\u201d she said.<\/p>\n

…there\u2019s been a massive reduction in advice professionals…<\/p><\/blockquote>\n

\u201cYou know, a lot of people still have simple wills, and they don\u2019t think about that asset transfer post-death \u2013 the tax impacts and the risks.<\/p>\n

\u201cWe work closely with estate planning lawyers as well, and the educational piece with our clients around testamentary trusts.\u201d<\/p>\n

\"Kate
Kate Kimmorley, Principal, Kimmorley Financial Management.<\/figcaption><\/figure>\n

Kimmorley also raised the issue of a lack of advisers, saying her firm is one of those struggling to keep up with demand.<\/p>\n

\u201cWe know there\u2019s been a massive reduction in advice professionals,\u201d she said. \u201cIt\u2019s been tough finding the time to think proactively about that next level of engagement and making that work in our businesses, to communicate with the next generation.<\/p>\n

\u201cBut clients need to be more informed. It\u2019s our responsibility to keep those things front of mind for our clients at any age.\u201d<\/p>\n

Next generation<\/strong><\/p>\n

Ramirez also touched on working with the next generation of clients.<\/p>\n

\u201cWe just basically say, \u2018Your children can piggyback on your wealth by conglomerating their supers or their investments\u2019. That\u2019s usually a great start,\u201d he said.<\/p>\n

Ramirez also shared a tip on ensuring clients\u2019 children know who to turn to for help, saying: \u201cLinkedIn is our business card.\u201d<\/p>\n

\u201cWe enforce that,\u201d he said. \u201cWe\u2019ll say to clients, \u2018make sure that your son or daughter knows who we are, so they know who to call if something happens\u2019.<\/p>\n

\u201cThat helps with that introduction \u2013 by basically protecting the client. The older client.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

While many parents want to support their children and grandchildren with cash gifts and loans, they also need financial security in their later years, says Marshall Ross, Partner Education Manager at Acenda. Speaking during an online seminar on generational wealth transfer \u2013 $3 trillion is expected to pass from baby boomers to younger generations over […]<\/p>\n","protected":false},"author":23,"featured_media":78419,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241,6994,4587,5622],"tags":[],"class_list":{"0":"post-78408","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-conferences-and-events","8":"category-education","9":"category-estate-planning","10":"category-superannuation"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/78408","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=78408"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/78408\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/78419"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=78408"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=78408"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=78408"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}