Estate Planning - How Australians can build and protect generational wealth
Why Estate Planning?
Estate planning goes beyond just preparing a will – it’s about wealth and assets being protected, preserved, and passed down to your loved ones the way you intended. In a challenging economic climate, with rising house prices over the years and the increasing cost of living, securing the financial futures of your loved ones has never been more important.
Australians are now supporting their children’s property dreams
In addition, it’s estimated that the average first home buyer needs at least 12 years to save for a deposit for the average unit and 16 years for the average house in Australia.1
With these factors in mind, high-net-worth parents, those under 50 with $1m or more in investable assets are now shifting their priorities to supporting their children financially, particularly with purchasing their first home (80%) and having enough to leave behind an inheritance (84%).
Similarly, older high-net-worth Australians are planning to support their children across other specific financial goals including funding future weddings (43%). This also extends beyond their own children to grandchildren, with 40% saying that paying for their children’s and grandchildren’s school fees is a priority.
The powerful role of investment bonds in estate planning
Beyond the role of investment bonds to accumulate wealth, Generation Life Investment Bonds serve as an invaluable tool for estate and succession planning. With 74% of claims made against estates being successfully challenged in Australia, investment bonds offer an advantage.2 They can be structured as non-estate assets, allowing beneficiaries to be nominated and can bypass probate, whilst still passing on wealth with certainty and confidence.
Generation Life Investment Bonds provide a streamlined approach to wealth transfer that can minimise delays and the administrative burden typically associated with settling estates. They also provide the ability to transfer ownership to an intended recipient tax-free on a chosen date, either before or after the investment bond owner’s date of death, with options to restrict how recipients can access the funds.
The flexibility to control when and how nominated beneficiaries receive inheritances, with the added layer of protection in the event of bankruptcy of the investment bond owner are just some of the other reasons for investment bonds increasing popularity as succession tools.
“We envisage a future when more trust fund kids become investment bond kids, set up by their parents to achieve specific goals in a tax-effective way that will help them live happy, fulfilled lives.” – Felipe Araujo, Chief Executive Officer and Managing Director at Generation Life.
Find out more about how investment bonds can be a tax effective, unrivalled estate planning tool, please contact our office and make an appointment with our Financial Advisor, Sharon Goodwin.
