DAWN THOMAS: Why baby boomers are wary of an early inheritance, and how you might change their mind

Australians are about to experience an unprecedented intergenerational wealth transfer.

It’s estimated about $3.5 trillion in assets will transfer from baby boomers to younger generations by 2050.

For a lot of the so-called younger generations, much of this wealth will arrive when the recipients are in their late 50s, long after many could have most benefited from it.

So, what is stopping boomers from an early transfer of wealth while they are still alive?

Of course, one reason is the boomer generation is ensuring its own financial security. But another reason I hear a lot as a financial adviser working with retirees is the older generation — who have, in many cases, generated that wealth themselves — want to see their children demonstrate financial maturity.

In today’s environment, where housing cost hikes and cost-of-living pressures are squeezing younger generations, early support could make the biggest difference to them, and to how far that dollar goes when purchasing property.

Starting a conversation in your family about this doesn’t have to feel awkward. Framing it in terms of shared values, mutual goals and planned intent can pivot inheritance talk from emotional to empowering.

Here’s why your parents are holding back, and what you can do about it

1. Show thoughtful financial habits

In their era, hard work and frugality built financial security. If you’re showcasing a “you only live once” spending style, frequent holidays or flashy purchases, it may signal to parents that the money won’t be used responsibly.

Demonstrating savings, planning, and sensible budgeting can reassure them their legacy will be put to good use.

2. Align with legacy values

Parents often prefer wealth to go toward lasting assets or experiences.

Highlight how you might use funds to contribute towards a house deposit, pay down a mortgage, or invest in family education, and investments that leave a tangible legacy, rather than disappearing in short-term consumption.

3. Offer lower-risk options

Many retirees are conservative by nature. Rather than telling them you will use potential funds for high-risk investments, propose using structured vehicles like education bonds or investment bonds, which separate ownership from benefit, offering both flexibility and control, without frightening complexity.

4. Bring legal reassurance where needed

Some parents may worry about break-up scenarios causing money gifted to leave the family.

Offering to protect funds through a binding financial agreement can breathe comfort into the process, showing you’ve thought through implications carefully.

5. Understand gifting limits and age pension impact

If your parents are on, or plan to rely on, the age pension, they can gift up to $10,000 a year — up to $30,000 over five years — without it affecting their entitlements. Small, periodic gifting might be a palatable way to provide early support.

We’re on the cusp of a historic wealth shift.

Without early planning and mutual understanding, inheritance becomes an emotional and chaotic end-of-life event rather than a strategic tool for empowerment for multiple generations.

Whether you’re the parent or the child, this isn’t a conversation that should wait.

Dawn Thomas is a Perth financial adviser at The Wealth Designers.