Australia is currently in the middle of what’s been described as the largest transfer of private wealth this country has ever seen – an estimated $5 trillion moving from the richest generation in history to their children and grandchildren, driven by ageing demographics, decades of superannuation growth and extraordinary rises in property values.

And yet, according to a recent white paper from Shaw and Partners, only 42 per cent of people surveyed had a clear wealth transfer plan in place. If that sounds like you, you’re firmly in the majority, not the exception. But it’s worth understanding what a wealth transfer plan actually is, why a will alone doesn’t cover it, and why having this conversation with your family sooner rather than later matters more than most of us realise.

What is a wealth transfer plan, exactly?

A wealth transfer plan is broader than a will. According to Adam Dawes, a senior financial adviser at Shaw and Partners, a will is really just “a document that shows the financial separation of assets” – who gets what, in strictly legal terms. A genuine wealth transfer plan goes further, addressing the family values behind those decisions: how you want the money to be used, why you’ve made the choices you have, and how you want to support your family, both after you’re gone and, increasingly, while you’re still here to see it.

Why so many families avoid the conversation

Research conducted by Shaw and Partners with CoreData identified six common psychological reasons people put this conversation off: fear of death, a reluctance to give up control, not wanting to spoil their children, dreading family conflict, feeling overwhelmed by the complexity of it all, and simply not wanting to disclose how much wealth they actually have.

Of these, Dawes says loss of control is the one he sees most often, and the hardest to work through. People spend decades building and controlling their wealth, he explains, and letting go of that control, even in planning, can feel deeply uncomfortable.

There’s also a generational pattern at play. Many of us grew up in households where money simply wasn’t discussed, and that silence has a way of repeating itself down the family line. As Dawes puts it, plenty of his clients whose own parents never talked to them about death or money go on to avoid exactly the same conversation with their own children. His advice is blunt: most people in their 80s should already be having this conversation, because waiting until it feels urgent often means it’s too late.

It’s not really about the tax

Interestingly, the same research found that tax was the top concern for most people going through this process, while fair distribution of wealth among family members ranked a distant fourth. Dawes believes those priorities are the wrong way around. Too many families spend considerable time and energy on the tax side of things, he says, without properly working through how the family itself will actually handle the transition emotionally.

That said, tax genuinely does matter, particularly if you’re holding long-term share investments. If you bought shares decades ago at a fraction of today’s price, the capital gains implications of transferring them now can be significant, and are well worth working through properly with an accountant before an estate is even formed.

A simple tool worth considering: the letter of intent

One practical step Dawes recommends is preparing a “letter of intent” alongside your will – not a legal document, but a written explanation of the thinking behind your decisions. Who gets what, and why. He describes it as something that can genuinely defuse family conflict, taking away the misunderstanding that so often turns wills and funerals into flashpoints for resentment, regardless of how large or small the amount of money actually involved is.

Consider starting the transfer while you’re still here

There’s a strong case, according to Dawes, for beginning at least part of your wealth transfer during your own lifetime, rather than leaving everything to a single event after death. Once an estate is formed, the rules become considerably more rigid – while you’re still here, there’s far more flexibility around timing, structure and tax planning.

Many older Australians have paid off their mortgage and have money sitting comfortably in the bank, while their own adult children are still juggling a mortgage, school fees and the cost of living. Giving some of that support now, while you’re able to see your children actually benefit from and enjoy it, is something Dawes says is genuinely worth considering, rather than assuming everything must wait.

For anyone with wealth tied up in property or a family business, this becomes even more important. Genuine succession planning is needed well before decisions become urgent – particularly if a move into aged care is on the horizon, where legal obligations and asset tests can complicate things considerably if left until the last minute.

Three things you can do right now

If you know you should be having this conversation but haven’t quite started, Dawes suggests three practical entry points:

Get the basics in place. At minimum, make sure you have a valid will and an Enduring Power of Attorney.

Get professional advice. Ideally, a coordinated team of a financial adviser, accountant and solicitor working together, rather than tackling it alone.

Write a letter of intent. Put the reasoning behind your decisions down on paper, and share it with your family while you’re still able to explain it in your own words.
And if even that feels like too much to start with, Dawes offers a simpler first step still: this weekend, simply tell your family what you’re doing, or ask your own parents whether they’ve got a will sorted. That one conversation is often all it takes to get the ball rolling.

This article is general in nature and isn’t personalised financial or legal advice, as it doesn’t take into account your individual circumstances. Before making decisions about your estate or wealth transfer plan, consider speaking with a licensed financial adviser, accountant and solicitor.