Protecting Family Wealth

Protecting Family Wealth - We All Count

Protecting Family Wealth

Thinking about helping the kids out with that first home? Read this first

Family wealth can take a lifetime to accrue, but can disappear in an instant through poorly considered acts of generosity.

This three-minute read may be one of the most important articles you ever read!

Many parents and grandparents are often willing to help younger generations with funds towards a house or education. It’s a wonderful gift – but there can be some serious traps.

The person who receives the funds (called the “beneficiary”) needs to ensure that any early inheritance isn’t later caught up in a matrimonial or estate planning dispute, just because it hasn’t been thought through.

Here are two strategies to help you avoid losing your accrued family wealth, and still be generous!


Strategy 1 – Family Friendly Loan

One way of safeguarding the transfer of assets and protecting family wealth is through a family friendly loan, rather than a straight-out gift. These types of loans are preferred by parents who are looking to help their children, but at the same time are unsure of their own future financial requirements.

Here’s the big advantage…

If a child has a failed relationship, the funds given to the child would in most circumstances end up in the pool of funds that are split.

So, your FAMILY money could very quickly end up with another family.

Instead of a gift, a properly documented loan to a child could protect the assets from becoming part of a child’s divorce settlement.

In the event of a child’s divorce, the loan could be recalled to avoid it becoming part of a settlement.


Strategy 2 – Gift or Sell Assets Before Death

You may find that you save a lot of tax if you deal with your assets before death, rather than leaving them in your name to be distributed by your Will.

An example is assets held within a Self-Managed Superannuation Fund (SMSF) that are left to a non-dependant who may end up incurring a tax liability on the taxable component of the death benefit at a rate of 15% or 30% (plus the 2% Medicare Levy).

With proper estate planning, the money could be withdrawn in some circumstances before death, tax-free.

There could also be tax benefits in selling certain assets acquired before 20 September 985 (pre-CGT) and distributing the proceeds before death without incurring capital gains tax.


The bottom line? Before you considering gifting a family member part of your family wealth, make an appointment with us to create a FAMILY ACTION PLAN. We can help you plan ahead, while still being generous.


Contact the friendly team today at We All Count on (08) 8531 0577 or


General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.

Hannah Baseley

Partner – Adelaide