The issue of whether or not to leave an inheritance behind for your family can be very important in planning your end of life arrangements.
It’s something that many of us have strong opinions about, and it’s been the cause of arguments and debates within many families… so the process of whether to leave an inheritance or not, should be handled sensitively.
Those for “Yes”
Yes, of course you should. Leaving your children an inheritance is a good thing, not just for what it means to your kids, but also to you as a parent. There’s no denying the financial advantages that arise from receiving a family inheritance. For one thing, it can help the whole family to have a monetary resource to rely on in the event of those unexpected events or emergencies.
Many people also like the idea that they will still be able to provide for their children or family as a whole even after they have passed away. It can help give peace of mind and security that their loved ones will be looked after.
Some people may also see the process of giving back to the younger generations as being an important part of the natural evolution of a family, helping to support its members throughout the years.
Often, inheritances may not even be a conscious decision. Rather, they are the result of lifelong frugal living and saving habits that can build up an unexpected resource outlasting the saver’s needs1, that are then passed onto surviving kin.
Those for “No”
For some people, leaving an inheritance just isn’t a priority. Do you have an obligation to leave your children an inheritance? No. And should you struggle to leave a sum of money for your kids, if it means cutting back on your own needs?
With the Australian life expectancy for both genders increasing significantly over the last century2, it’s not surprising that many people are also choosing to spend more money on themselves post-retirement.
The trend towards ‘active ageing’ is also playing a part, as elderly Australians are encouraged to spend time and often, money, on fulfilling their own wishes and taking up hobbies in their later life. This trend has been coined as “SKIing” or spending the kids inheritance!
In fact, a June 2012 report from the Productive Ageing Centre showed only 23 per cent of retirees were very concerned about being able to leave money behind for their children.3
The clash between leaving something behind to help out the children (particularly with costs like a funeral) versus spending on oneself could leave many older Australians debating whether or not leaving a family inheritance behind is necessary. However, final expenses insurance can present another way to gain a compromise.
Thinking about a compromise
Final expenses and funeral insurance can provide your loved ones with a benefit that can go towards covering your end-of-life costs.
While it’s not a family inheritance, final expenses insurance can still give your family an extra source of financial assistance during a difficult time. It can be used in whatever way your nominated beneficiary decides, and it doesn’t need to be used solely on the funeral and burial services.
There are many final expenses policies available, and you can compare products with Choosi to determine what level of cover suits you best. The benefit can go up to $15,000, and in cases of accidental death it could increase to up to $45,000.
Arranging this policy can be one way of providing for your family after you have gone, without setting aside a separate inheritance amount.
- Perspectives on intergenerational bequests: Inheritance arrangements and family resources, Australian Institute of Family Studies
- Life expectancy, Australian Institute of Health and Welfare
- Financial Wellbeing: Concerns and choices among older Australians, Productive Ageing Centre
These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.