Managing inheritance expectations with your kids
Written and accurate as at: Jun 15, 2026 Current Stats & Facts
There are plenty of reasons why parents might skirt around the topic of inheritances. For some, it’s because it naturally conjures up thoughts of ageing and mortality. For others, it’s out of fear of saying the wrong thing or triggering expectations that can be hard to manage later on. Sometimes the reason is more straightforward: money is just too difficult to talk about.
But putting the inheritance conversation off indefinitely can create confusion and make future decisions more difficult for everyone. Below, we explore some of the key questions parents should consider before they broach the subject.
Have you thought about an early inheritance?
There’s something to be said about delayed gratification, but when it comes to financial windfalls, most people would rather they come sooner in life than later. That’s for the simple reason that money can be put to more productive – and potentially even life-changing – ends when someone is younger.
This is at the core of what’s known as ‘the time value of money’, which you’ve probably heard expressed in the more colloquial phrase ‘a dollar today is worth more than a dollar tomorrow.’|
If your children are young adults and you’re able to give them their inheritance while you’re still alive, it could help them tick off major financial milestones (like buying a home or paying off student debt), start a family, or take career risks they wouldn’t otherwise consider.
It might also be a joy to actually see the fruits of all your hard work over the years improving your children’s lives, instead of outsourcing the entire experience to dispassionate estate lawyers down the line.
Fairness or equality?
Do you have multiple children? Your instinct might be to divide your estate evenly between them. But depending on each child’s circumstances, equal treatment could potentially result in unequal outcomes.
Maybe one child has spent years helping care for you, while another has already received significant financial support. Maybe your kids are simply at different life stages or facing different challenges, whether it’s disability, financial hardship or the pressure of raising a young family.
There’s no universally correct approach here, but if you do decide to divvy out different amounts, it’s especially important to be transparent. These decisions require buy-in from everyone if conflict is to be avoided, so make sure to explain your reasoning clearly.
Is the retirement you want still within reach?
Earmarking a portion of your retirement savings to give as an inheritance means you’ll have less to live off. And as generous as you might be feeling, it would be unwise to give up your own security and comfort.
So before making any promises to your children, make sure to stress-test your finances. You might be willing to accept a slightly lower standard of living now, but a sudden, surprise expense could derail even the most modest plans if they don’t have a buffer in place.
A few other things you’ll need to consider:
- Australians are living a lot longer than they used to. A retirement plan put together at 60 may need to last until your 90s, all while running a gauntlet of inflation shocks, market downturns, health expenses and aged care.
- Any assets above $10,000 you give away in a single year (or $30,000 over five years) may still count towards your income and assets test for five years, meaning your Age Pension amount could be impacted. That applies whether you gift, transfer or sell them for less than they’re worth.
What if your own retirement is a priority?
If it turns out that you only have enough retirement savings to support your lifestyle, there’s no shame in letting your kids know. Doing so now is in everyone’s best interest.
Your kids might have skewed ideas about how much they can expect to receive, or how large a nest egg you have in the first place. And ideally you want to avoid a situation where someone in your family is making plans based on things that won’t materialise.
Ultimately, your children will need to stand on their own two feet financially. An inheritance might be a welcome bonus, but it shouldn’t be assumed. And by being upfront now, you give them the chance to focus on the things they can control.