The Rise of Grandchild-Focused Inheritance: Australians Bypass Children to Secure Their Legacy

In a surprising shift within the realm of inheritance, a growing number of older Australians are opting to skip their children and instead bequeath their wealth directly to their grandchildren. This trend, driven by concerns over divorce, financial challenges, and the desire to protect the family legacy, is gaining traction across the country, as revealed by data from legal professionals.

Securing the Future: Grandparents Invest in the Next Generation

Bypassing the Children's Generation

Recent data from Safewill Legal, a leading law firm, has shown a significant increase in the proportion of wills that include grandchildren as beneficiaries. Over the past five years, the firm has witnessed a tripling of this trend, with a staggering 225% increase in the number of wills that completely bypass the children's generation and go directly to the grandchildren.This shift in inheritance patterns is driven by several factors. Isabelle Marcarian, the principal solicitor at Safewill Legal, explains that many grandparents, typically in their 60s, 70s, and 80s, have observed their children, now in their 40s, 50s, and 60s, already achieving a certain level of financial security. As a result, these grandparents see an opportunity to invest their wealth in the younger generation, who may be struggling with the challenges of high housing costs and a cost-of-living crisis.

Protecting the Family Bloodline

Another driving force behind this trend is the grandparents' fear of their children's potential divorces. Marcarian states that grandparents are "worried about the wealth going sideways" and are therefore opting to bypass their children's generation to ensure the family's wealth remains within the "bloodline" for longer, directly benefiting their grandchildren.This sentiment is echoed by Aussie resident Isabel Almendrades, who decided to name her grandchildren as the sole beneficiaries of her will. "Marriage doesn't guarantee permanency," she explains. "I don't want my estate to go to a stranger and for my grandkids to miss out."

Consent and Understanding

Interestingly, this shift in inheritance patterns is often accompanied by an understanding and consent from the children. Marcarian notes that "a lot of the time, it's done with the consent of the child, or the child understands that their own child is benefiting, and they've kind of all decided together, because parents love their children."This collaborative approach ensures that the decision to bypass the children's generation is not a source of family conflict, but rather a carefully considered strategy to secure the family's future.

The Changing Landscape of Inheritance

The rise of grandchild-focused inheritance is part of a broader shift in how Australians view and plan for the transfer of wealth. Recent research from Finder has revealed that a significant portion of Australians are expecting to receive an inheritance, with some even hoping to access it before their loved ones pass away.However, the Spending the Kids' Inheritance (SKI) movement, exemplified by individuals like Trudy Wertheim and the Ryland couple, is challenging the notion that inheritance should be expected. These individuals believe that the mindset of younger generations needs to change, and that the wealth accrued should be used to enjoy the later stages of life, rather than being passed down as an entitlement.As the Baby Boomer generation prepares to hand down an estimated $3.5 trillion in wealth, the decisions of older Australians will continue to shape the future of inheritance in the country. The growing trend of grandchild-focused inheritance highlights the shifting priorities and concerns of these older Australians, as they seek to secure the legacy and well-being of their family's youngest members.