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”.
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“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.
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“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.
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.
