The Kids Are OK: Effective Intergenerational Wealth Transfer

Michelle Bromley CFP®, Director & Private Client Adviser – Strategy and Advice

Intergenerational wealth transfer is more than just passing on assets; it's about securing the financial future of generations to come. In the realm of financial planning, several strategies emerge as pillars for the effective transition of your wealth to future generations over time. Among these strategies are the establishment of a Trust, either during your lifetime or as part of your Will, and other vehicles such as investment bonds, each serving distinct yet complementary roles in safeguarding and growing family wealth.

Trusts: Safeguarding Generational Wealth

Trusts have long been recognised as potent vehicles for wealth preservation. By establishing a trust, individuals can transfer assets to a separate entity managed by a trustee, who administers the assets for the benefit of designated beneficiaries. Let's explore the key advantages of using trusts for generational wealth transfer and capital preservation.

Safeguarding Wealth

Discretionary Trusts stand as stalwarts in the realm of wealth preservation. By transferring assets into a trust structure during your lifetime, families can insulate their wealth from potential risks and ensure its strategic management across generations. The allure of a Discretionary Trust lies in its flexibility and robustness. They provide a shield against creditors, divorces, and other external threats while allowing for tailored distribution schedules and tax efficiencies. Moreover, they foster a culture of stewardship, instilling financial discipline and values in beneficiaries.

Inter-Generational Wealth Transfer

Trusts possess the invaluable strength of intergenerational wealth transfer, with a term that can span up to 80 years. This longevity makes trusts an invaluable tool for managing family wealth across multiple generations, ensuring the sustained preservation and growth of assets over an extended period. The trust property does not form part of an estate on death, minimising the risks and complexities associated with Will disputes. Assets that do flow into your estate can also be transferred into a Trust created by your Will, known as a Testamentary Trust.  

Testamentary Trusts: Preserving Legacies with Purpose 

Testamentary trusts, established via a Will, offer a strategic avenue for channelling estate assets with purpose. Beyond mere asset distribution, testamentary trusts serve as guardians of family legacies, ensuring that wealth transcends generations intact. These trusts provide a framework for asset protection, appointing a Trustee who can also be a non-family member who has a fiduciary role in shielding inheritances from the perils of mismanagement or external claims. Furthermore, they empower testators to dictate the terms of wealth transfer, incorporating provisions for education, charitable giving, and the fulfillment of familial aspirations. 

InvestmentBonds: Crafting Financial Security with Foresight

In the pursuit of long-term wealth management, investment bonds emerge as versatile tools with inherent benefits. Investment Bonds provide you with control over how and when the investment is passed on to your preferred beneficiaries.  You can structure an investment bond within your Trust, or if held in your personal name you have the flexibility to choose whether it forms part of your Will estate or is passed on directly to beneficiaries thus bypassing the complexities of probate and any risk of a challenge to your Will. You may designate specified beneficiaries, including whether they will receive regular income payments, which may be tax-free after the bond has been held for 10 years, and include provisions for the future transfer of capital.  

Superbly Tax Savvy: Passing on your Superannuation

The tax-effective transfer of superannuation benefits is a crucial aspect of comprehensive estate planning, particularly in maximising the legacy left for loved ones. One consideration revolves around the timing of benefit withdrawals from the superannuation environment. Withdrawing benefits tax-free before death can be a strategic move to mitigate the burden of lump sum tax on non-death benefit dependents, particularly adult children. By proactively managing withdrawals, particularly where there is the opportunity to ‘wash-out’ taxable components with a withdrawal-and-recontribution strategy, individuals can optimise tax efficiency and ensure that their beneficiaries receive the full value of their superannuation benefits. This approach not only minimises the tax implications for inheritors but also facilitates a smoother transition of wealth, empowering beneficiaries to navigate their financial futures with confidence and security.

Beyond the Traditional: Exploring Innovative Strategies

While your Will, Trusts and investment bonds may form the cornerstone of intergenerational wealth transfer, forward-thinking families may explore additional avenues to fortify their financial legacy. For those with a family governance objective, philanthropic initiatives can enrich the tapestry of wealth transfer planning, fostering cohesion, purpose, and societal impact. A Private Ancillary Fund (PAF) is a not-for-profit trust established in Australia by individuals or a family group who, perhaps having contributed to charitable causes over the years, are now keen to ensure that the legacy they leave behind transcends mere material wealth.

Conclusion: Securing Tomorrow, Today 

Intergenerational wealth transfer is a testament to a family's foresight, resilience, and commitment to posterity. Through the strategic deployment of Discretionary Trusts, Testamentary Trusts, investment bonds, and innovative wealth transfer strategies, families can safeguard their legacy and empower future generations to thrive. By embracing a holistic approach to wealth management, rooted in principles of stewardship and sustainability, the journey of wealth transfer becomes not merely a transactional endeavour but a profound expression of familial values and aspirations. In doing so, the kids are not just "OK"—they are poised for a future of prosperity and purpose.

Contact one of our Wealth Advisers for a tailored financial solution, utilising our strategic knowledge and investment acumen to help your family realise your long-term generational wealth aspirations.

The information in this article contains general advice and is provided by Primestock Securities Ltd AFSL 239180. That advice has been prepared without taking your personal objectives, financial situation or needs into account. Before acting on this general advice, you should consider the appropriateness of it having regard to your personal objectives, financial situation and needs. You should obtain and read the Product Disclosure Statement (PDS) before making any decision to acquire any financial product referred to in this article. Please refer to the FSG ( for contact information and information about remuneration and associations with product issuers. This information should not be relied upon as a substitute for professional advice, and we encourage you to seek specific advice from your professional adviser before making a decision on the matters discussed in this article. Information in this article is current at the date of this article, and we have no obligation to update or revise it as a result of any change in events, circumstances or conditions upon which it is based.

Thank you for submitting your details, now you can download here.
Download Now
Oops! Something went wrong while submitting the form.
Thank you for submitting your details.
Oops! Something went wrong while submitting the form.

Take up this one-time exclusive offer and choose the service and expertise you need to make your SMSF work for you, speak to a specialist today to get started.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Terms & Conditions:
The promotion is not valid for cash or cash equivalent and is non-transferable. Cannot be combined with other offers, discount promotions or promotions. Promotions may be subject to availability. All monetary amounts specified in these terms and conditions are in Australian dollars (AUD). All pricing excludes GST. To redeem this promotion during the promotional period, you must complete the form submission included in the communication or landing page. Stock Doctor, Bell Direct and Prime reserves the right to modify or amend this promotion and cancel or suspend the promotion without prior notice. By completing the form or attempting to participate in this promotion, you agree to accept and be bound by these terms and conditions from StockDoctor, BellDirect and PrimeFinancial. The promotion from Bell Direct starts on Friday 27th October 2023 at 9:00 am AEDT and ends on Thursday 7th December 2023 at 5:00 pm AEDT. The promotion from Prime starts on Friday 27th October 2023 at 9:00 am AEDT and ends on Thursday 7th December 2023 at 5:00 pm AEDT. The promotion includes from StockDoctor: a 30-day complimentary membership to Stock Doctor. The promotion starts on Friday 27th Oct 2023 at 9:00 am AEDT and ends on Sunday 24th December 2023 at 5:00 pm AEDT and $200.00 AUD discount on new members joining Stock Doctor. The promotion starts on Friday 27th Oct 2023 at 9:00 am AEDT and ends on Sunday24th March 2024 at 5:00 pm AEDT.

This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 ('Prime'). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information. Privacy Policy | Financial Services Guide

Lincoln Indicators Pty Limited (Lincoln) ABN 23 006 715 573, as Corporate Authorised Representative of Lincoln Financial Group Pty Ltd ABN 70 609 751966, AFSL 483167. This communication may contain general financial product advice or forward-looking statements regarding our intent, belief or current expectations with respect to the market conditions. Caution is advised in placing undue reliance on these forward-looking statements, as our advice has been prepared without taking account of your personal circumstances. Therefore, you should consider its appropriateness, in light of your objectives, financial situation and needs, before acting on it. Before acting on any advice, you should consider the appropriateness of the advice, and we recommend you obtain financial, legal and taxation advice before making a decision. Please refer to our Financial Services Guide (FSG) for more information at Lincoln Indicators Pty Ltd. If our advice relates to the acquisition or possible acquisition of a particular financial product, you should obtain a copy of and consider the Product Disclosure Statement (PDS) at Lincoln Indicators Pty Ltd before making any decision. 

The Bell Direct service is provided by Third Party Platform Pty Limited trading as "Bell Direct" (ABN 74 121 227 905) an Australian financial services licensee (AFSL 314341) a Participant of the ASX Limited Group and a Trading Participant of Cboe Australia. Bell Direct does not provide investment advice. You should consider your own financial situation, particular needs and investment objectives before acting on any of the information available at

Testimonials are provided by third parties for information purposes only and are not intended, and should not be taken to be financial product advice. Please refer to “Terms of Use”, “Important Information”, Terms and Conditions and The Privacy Policy Guide for StockDoctor, BellDirect and Prime for more information.

Contact details:
Phone: 03 8825 4745

A unique and personal service approach to support all your business advisory and personal wealth management needs.

wealth strategies