Money issue millions of Aussies want Baby Boomers to know: 'Drastically improves their life'

Millions of Aussies want to receive their inheritance as a gift while the family member is still alive. (Source: Getty)

The cost-of-living crisis is gripping the wallets of Aussies around the country and millions of people are calling on the oldest residents to give them a hand. Inheritance is a touchy topic and it's usually only brought up when someone has kicked the bucket.

However, new research has revealed how many people are desperate for their inheritance to be given sooner rather than later. Finder data found one-third of Australians are expecting to receive an inheritance.

Interestingly, two in five respondents, equivalent to 8.3 million people, admit they would rather have it as a gift while the family member is still alive instead of waiting until they die.

Are you expecting an inheritance? Email stew.perrie@yahooinc.com

Sarah Megginson, personal finance expert at Finder, said there's a massive benefit to this route.

"An early inheritance lets the parent see their children or grandchildren enjoying the gift, and the financial windfall at a younger age gives them more opportunity to use it towards something that drastically improves their life, like a deposit on a home or investing it in education," she said.

"It's not a decision that should be made without some serious consideration of your future financial needs and also the tax impacts."

According to Finder, 10 per cent of Aussies reckon they will get an inheritance within the next 10 years, while another 13 per cent believe it will be up to 20 years before they get a chunk of change.

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Baby Boomers are expected to provide the largest intergenerational wealth transfer in Australia's history.

The Productivity Commission predicts roughly $3.5 trillion (yes, with a T) will be handed down to generations below Boomers when they die.

Finder found 28 per cent of Aussies are expecting an inheritance of more than $100,000, while 20 per cent think they will receive between $50,000 to $100,000.

But it's not just cash that will be flowing through the family lines.

Property is also an option for some Aussies, with one in five saying they will be given one home, while 4 per cent said they will inherit two addresses.

"After decades of building up wealth, Baby Boomers are passing down trillions in savings and investments to their children and grandchildren," Megginson said.

Wills are extremely important for inheritance

She warned Aussies on both sides of the inheritance conversation to ensure all affairs were sorted out well in advance.

"It's always best to make those decisions upfront and with transparency, so relatives aren't left with false expectations," she explained. "For those expecting to be a beneficiary, it's important to plan for how to make the most of the inheritance for generations to come."

Finder insurance expert James Martin revealed there was a huge uptick in the number of Aussies getting their affairs in order after the COVID pandemic.

“The biggest benefit of drawing up a will is the peace of mind it brings in ensuring your hard-earned assets are distributed amongst those you wish,” he said.

“By developing a comprehensive estate plan, you can guarantee that your assets go to the right people.”

The other side of the coin: Can I inherit debt?

While there are plenty of Aussies who are expecting to receive tens of thousands of dollars when a family member dies, others might be worried about inheriting debt.

Thankfully for them, as a general rule, debt usually isn't inherited, but there are exceptions to the rule.

If the debt is a guaranteed loan or if a loan was made through a joint account then it will need to be paid off. Another way a loan can be inherited is if it was secured against an asset owned by someone else.

If the debt was guaranteed, the guarantor made a legally binding agreement to repay the debt in the event that the borrower defaulted on the debt.

The guarantor, therefore, will need to repay the outstanding portion of the loan.

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