Estate Planning and Wealth Transfer

Ensuring that wealth is passed on to the next generation is important to many people, and is often a key consideration when it comes to estate planning.

The cumulative amounts of wealth that are passed on can be considerable, and nowhere more so than the United States, where a recent report revealed that an estimated US$59 trillion is expected to be transferred from the estates of 93.6 million Americans between 2007 and 2061.

The report, which was produced by researchers at the Centre on Wealth and Philanthropy at Boston College, says that this wealth will transfer in a number of different ways, including:

• Heirs will receive US$36 trillion under provisions made in Wills and estate plans.
• Federal estate taxes will claim US$5.6 trillion.
• The sum directed from final estates (for which there is no surviving spouse) toward charity is estimated at US$6.3 trillion.

As well as charitable giving through Wills, the study has identified a strong trend toward more lifetime giving amongst Americans. Over a period of 55 years, nearly US$27 trillion is expected to be given to charity says the report - US$20.6 trillion through lifetime giving and US$6.3 trillion through estates and various estate planning approaches.

In addition, the study authors have also tracked what they call "accelerated wealth transfer". This is where a portion of wealth that previously would have been transferred on through a Will is now passed on during the wealth owner's lifetime.

This is particularly apparent amongst high net-worth households, which are now allocating greater amounts of their wealth to trusts, foundations and charities as part of estate planning during their lifetime.

Wealth transfer is also an important consideration for high net-worth Australians, as evidenced by the recent news that billionaire Paul Ramsay left around $3.3 billion to his charitable foundation, the Paul Ramsay Foundation.

Australian laws in this regard are complex so if you are considering leaving money to a charitable trust then speak to the legal team at Szabo & Associates Solicitors for professional advice.

Estate planning is important, no matter how large or small your estate, and should involve more than just making a Will. It provides you with an opportunity to enhance the value of your estate, and to maximise the benefit of the inheritance to your beneficiaries.

Contact us

If you are thinking of estate planning, or contesting, making or updating a Will, then it is important to seek expert legal advice as quickly as possible. Contact Szabo & Associates Solicitors today and speak with one of our specialist solicitors. Call us on (02) 9281-5088 or fill in the contact form to the right of this page.