Intergenerational Assets

What are Intergenerational Assets?

By this term, we at Continuum Financial Planners Pty Ltd refer to assets that a family accumulates over time and that then pass from one generation to another. Assets such as family heirlooms, ‘cultural’ treasures (personal intellectual property) and philosophies as well as wealth in the form of the generic asset classes of cash, property and ‘equities’.

Whilst some readers may ask where there is sufficient value stored in these areas to be concerned about how to best pass them through to following generations, consider that –

1. Cash may arise from sources including:
   • ‘bank’ accounts including term deposits
   • reversionary pensions
   • proceeds from life insurance policies
   • death benefits from superannuation accounts
   • gifts/ bequests from benefactors
2. Property may arise from the following sources:
   • the family home
   • investment properties held
   • bequests from benefactors
3. Equity(ies) exist in the following forms
   • share market portfolios
   • private/ ‘family business’ company shares – and

… all of these asset classes may exist in investments through managed funds outside of the superannuation environment.

Transferring intergenerational assets for family security

Utilising well-structured Estate Planning, hard assets (financial wealth) may pass directly to future generations, or be held in testamentary trusts for their benefit. Note that assets held in family discretionary trusts and other legal structures are managed differently in the Estate Planning process, albeit only indirectly through the Will in most cases.

There are a number of important aspects to consider in reviewing intergenerational assets and how they are held/ transmitted, including –

• Equity issues: between potential beneficiaries of the ‘family estate’ – elsewhere referred to as ‘estate equalisation‘;
• Liquidity: ability to transfer the financial benefit to the intended person(s), in the anticipated timeframe for them to enjoy the benefit;
• CGT matters: managing the consequences of capital gains tax on the transfer of the specific bequest;
• State/ Commonwealth tax issues: managing the consequences of taxation on the transfer of the specific bequest; and
• Retention: securing enduring benefit for future generations.

Act now for intergenerational asset protection –

The experienced wealth management advisers at Continuum Financial Planners can assist you with the process of reviewing the status of assets that are held for intergenerational transmission; and in the general process of Estate Planning. To ensure that your Estate Planning is in order, contact us for a meeting: use the link above, or phone 07-34213456 for a prompt response to your request. Our clients appreciate that – ‘we listen, we understand; we have solutions – and we care’: your best interests will be our concern regardless of any regulatory requirement or relaxation in regards such.

We thank McKays Solicitors for allowing us to base our article on this topic on material found in their website.
(This article, originally posted in January 2010 has been updated as at January 2014.)