According to an Australian attorney, the upcoming $3.5 trillion wealth transfer from Baby Boomers to younger generations raises alarms. With an increase in will disputes, Australians are warned that they may “waste tens of thousands” in pursuit of their inheritance if families fail to organize their assets.
Baby Boomers, the wealthiest generation in Australia, are anticipated to pass on a staggering $3.5 trillion over the coming years. The enormity of this wealth elevates the stakes for many Australians regarding their inheritance.
Hayder Shkara, principal of Justice Family Lawyers, noted in an interview with Yahoo Finance that he foresees an uptick in disputes surrounding wills as Baby Boomers embark on this monumental wealth transfer.
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“This marks the most significant intergenerational wealth shift ever, and it is bound to escalate tensions, especially in families where expectations clash with reality,” Shkara commented.
“A primary factor contributing to these disputes is the increasing value of real estate. Properties acquired years ago for minimal amounts may now be valued in the millions, altering family members’ perceptions of their entitlements.”
In Sydney, for instance, the average property value has surged to $1.18 million.
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“We are also observing an increase in blended families, estranged relationships, and informal caregiving arrangements, which can further complicate inheritance issues,” Shkara noted.
Recent findings from the Productivity Commission reveal that inheritances have significantly doubled, rising from $24 billion in 2022 to $52 billion in 2018.
Individuals over 60 are projected to transfer an average of $175 billion annually in wealth over the next two decades.
There has been a notable rise in family provision claims, where individuals believe they were unjustly omitted from a will or did not receive their fair share.
Shkara frequently observes scenarios where children who cared for their elderly parents contest wills after discovering their parents divided assets evenly among all siblings.
“The law acknowledges that while you can allocate your estate to anyone, you also have a duty to provide for certain individuals—such as your spouse or children,” he explained to Yahoo Finance.
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“We recently facilitated a case where a father equally divided his estate between his two children; however, one child had relocated interstate and kept minimal contact, while the other had provided daily care during his final years.
“The child who provided care insisted on receiving a larger share. This situation lacked an unequivocal solution, resulting in a contested estate where lawyers debated what would be deemed fair.
“Since the father did not document his intentions, the dispute escalated, causing the estate to incur significant time and legal expenses.”
Research from Australian Seniors indicates that a third of Australians over 50 lack a will, and nearly half of those with wills have not updated them in over five years.
“That’s a recipe for disaster,” Shkara warned.
“Dying without a will results in the law determining asset distribution based on a legal formula—not according to your true wishes.
“This increases the likelihood of dispute over your estate and leaves families confused with fewer assets than anticipated.”
Shkara has urged Australians to organize their affairs proactively.
“The more organized you are, the less likely disputes will arise,” he stated.
“A well-planned will, transparent discussions with family members, and a statement of wishes can preemptively address many potential disputes.
“I’ve witnessed siblings waste tens of thousands due to poorly drafted wills.”
However, Shkara noted that a will encompasses more than just financial matters; it can also ease the burden on your family in the future.
“Addressing these matters now prevents a lot of future stress,” he advised.
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