An Australian lawyer has sounded the alarm over the $3.5 trillion wealth transfer that Baby Boomers are about to pass on to younger generations. Will disputes are already rising due to growing wealth and Aussies are being warned they could “squander away tens of thousands” trying to get their inheritance if their loved ones don’t have their affairs in order.
Baby Boomers, who are Australia’s richest generation, are expected to transfer $3.5 trillion to younger generations over the coming decades. The huge scale of wealth means the stakes are higher for many Aussies when it comes to their inheritance.
Justice Family Lawyers principal Hayder Shkara told Yahoo Finance he expected disputes over wills would continue to rise as Baby Boomers begin the “great wealth transfer”.
“This is the biggest intergenerational wealth shift in history, and with that comes heightened tensions, particularly in families where expectations don’t align with reality,” Shkara said.
“One of the key drivers of these disputes is the rising value of real estate. A house that was purchased decades ago for a modest sum could now be worth millions, and that changes how family members perceive their entitlements.”
In Sydney, for example, the average property value has skyrocketed to $1.18 million.
“We also see a rise in blended families, estranged relationships, and informal caregiving arrangements, all of which can complicate inheritance matters,” Shkara said.
Inheritances have already more than doubled, with the Productivity Commission finding they had increased from $24 billion in 2022 to $52 billion in 2018.
Aussies over 60 are expected to transfer an average of $175 billion per year in wealth over the next two decades.
More adults challenging wills
There has already been a significant increase in family provision claims, which is when someone feels they’ve been unfairly left out of a will or didn’t get enough.
Shkara said he commonly saw children who cared for their elderly parents challenge wills when they found their parents had distributed assets equally among all siblings.
“The law recognises that while you can leave your estate to whoever you like, you also have a duty to provide for certain people—like your spouse or kids,” he told Yahoo Finance.
“We recently assisted in a dispute where a father left his estate equally to his two children, but one had moved interstate and had little contact with him, while the other had cared for him daily in his final years.
“The child who provided care felt strongly that they should receive a larger share. There isn’t a straightforward answer to this, so it resulted in a contested estate where the lawyers start arguing over what is right in these circumstances.
“Because the father didn’t document his wishes, the dispute escalated, costing the estate time and money in legal proceedings.”
‘Disaster’: Aussies don’t have up-to-date wills
Australian Seniors research found that a third of Aussies over 50 haven’t got a will and for those who do, nearly half haven’t updated it in more than five years.
“That’s a disaster waiting to happen,” Shkara said.
“If you die without [a will], the law decides who gets what based on a legal formula—not on what you would’ve actually wanted.
“It increases the chances of your estate being disputed, and results in a confused family with less assets than you hoped for.”
Shkara has urged Aussies to get their affairs in order early on.
“The better planned you are, the less likely you will have a dispute,” he said.
“A well-structured will, open discussions with family members, and a statement of wishes can prevent many of these disputes before they arise.
“I’ve seen siblings squander away tens of thousands of dollars because of wills that were not properly drafted.”
Skhara said a will wasn’t just about money though. It can also make life easier for your family down the track.
“Sorting it now avoids a world of stress later,” he said.
