Leaving and preserving a legacy

A lost opportunity for future generations. One in three Australians believe super is the best way to optimise wealth and leave a legacy, despite this not being its purpose.*

Australia’s superannuation system is the envy of the world. It does exactly what it’s been designed to do: support Australians to fund a dignified retirement. However, its purpose is to provide Australians with a retirement income, not for them to use it as a wealth transfer tool to leave a legacy when they pass away.

National knowledge gap

Generation Life’s Reimagining Legacy research identified a national knowledge gap, with 49% of Australians relying on a will to leave a legacy. Wills can create complexities if not drafted properly and can prevent wealth being transferred to the intended recipients with certainty.

Our research also identified that 34% of Australians were relying on their superannuation to leave a legacy unaware of the tax-inefficiencies of super as a wealth transfer tool when passing wealth onto non-dependants, as this isn’t it’s intended purpose.

20% of ultra high new worth individuals (UHNWI) admit that “not knowing how best to optimise their wealth” is preventing them from achieving their financial goals. This knowledge gap exists for people of all wealth brackets but is a particular concern for UHNWIs.

90% of Australians aren't using, or aren’t aware of investment bonds despite the innovations made to the new generation of investment bonds - a tax effective investment solution that offers flexibility, control and access at any time. There are many misconceptions around investment bonds, find out how we’ve innovated to debunk these myths and provide guidance on how they can be used to provide tax-effective financial outcomes.

Noel Whittaker, Finance and Investment expert

How to leave and preserve a legacy

If you're looking to build wealth in a tax-effective way, provide a child a financial head start, or pass on wealth and provide for loved ones with certainty, the new generation of investment bonds are an important investment solution.

The unique tax structure of an investment bond coupled with the diverse range of investment options you can select to suit your needs, will help you meet your long-term, emotional legacy goals.

How investment bonds can help leave and preserve a legacy

Leaving and preserving a legacy are the top financial goals for many Australians. Being able to leave their hard earned wealth to those they love according to their wishes is one of the top priorities for the population.

Generation Life’s new generation of investment bonds can help ensure that Australians can leave their legacy with certainty and peace of mind.

The estate planning benefits of investment bonds

Flexible and secure options to manage estate planning and wealth transfer with control and certainty

• A tax effective wealth accumulation solution allowing for easy, automatic wealth transfer

• Tax-free transfer of ownership for income and capital gains tax purposes and the 10-year advantage period is not reset when the transfer occurs

• Flexibility to structure the investment, as part of - or outside of - a will and legal estate

• Can be used to arrange for someone else to continue holding your investment after you pass away

• Offers peace of mind that a loved one's future will be looked after efficiently and cost-effectively

• Control how and when your future recipients can make withdrawals and limit the amount your recipients can access each year.

Investment Bonds avoid the delays, complexities and uncertainties sometimes associated with winding up an estate

• Avoids the complexities that can be associated with using a will or testamentary trust, or where there are complex family arrangements to deal with

• Wealth can be transferred in a will like fashion to family and non-family members, companies, trusts and charities

• You can nominate one or more beneficiaries to receive tax-free proceeds of your investment once you pass away, or you can schedule a future transfer to a specific person

• You can transfer ownership to intended recipients at a nominated future date, which can include the date you pass away.

Investment Bonds can take away the burden of loved ones paying for a funeral once you pass away

• Funeral bonds, a special type of investment bond, can also help you meet your future funeral costs, with no age or health restrictions

• You can incorporate your investment as part of pre-paid funeral arrangements, and there is also the potential to improve Age Pension benefits.

Speak to your financial adviser to find out more

Speak to your financial adviser today to find out more about Generation Life’s new era of investment bonds and their unique tax structure to help you leave your legacy with certainty and peace of mind.

*Reimagining Legacy Research - Generation Life - June 2023.