Australia is on the verge of the largest intergenerational wealth transfer in history, with Baby Boomers set to pass on $3.5 trillion to younger generations over the coming decades. As reported by Yahoo Finance, legal experts warn that this massive shift in wealth could lead to a surge in will disputes, leaving many Australians facing costly legal battles over inheritance.
Why the Wealth Transfer Could Lead to More Disputes
With property values soaring and family dynamics becoming more complex, disagreements over inheritance are expected to increase. Hayder Shkara, principal of Justice Family Lawyers, pointed out that as real estate prices continue to climb, family members may have different expectations about what they are entitled to inherit.
“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,” Shkara said.
Additionally, blended families, estranged relationships, and informal caregiving arrangements further complicate matters, as children who have taken care of their elderly parents may feel entitled to a larger share of the estate.
Inheritance Disputes Are Already on the Rise
Data from the Productivity Commission shows that inheritances in Australia have already more than doubled, increasing from $24 billion in 2002 to $52 billion in 2018. Australians over 60 years old are expected to transfer an average of $175 billion per year over the next two decades.
This has led to a rise in family provision claims, which occur when a person believes they have been unfairly excluded from a will or have not received what they deem a fair share.
“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,” Shkara explained.
How Australians Can Avoid Costly Will Disputes
Legal experts recommend that families start estate planning early to prevent conflicts down the line. Clearly outlining who will inherit assets and discussing these decisions with family members can reduce misunderstandings and legal challenges.
With a historic wealth transfer already underway, experts warn that those who fail to plan ahead may end up spending tens of thousands of dollars in legal fees, fighting over inheritances in court.
