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How to treat an inheritance with the respect it deserves · She's On The Money

0:00
Speaker 1: She's on the Money. She's on the Money.
0:23
Speaker 2: Hello, and welcome to She's on the Money, the podcast
0:26
Speaker 2: for millennials who want financial freedom. We are on the
0:30
Speaker 2: cusp of a mammoth intergenerational wealth transfer, with boomers expected
0:34
Speaker 2: to leave behind two hundred and twenty four billion dollars
0:37
Speaker 2: each year in inheritances by twenty fifty. To make sure
0:42
Speaker 2: we're all as prepared as possible, today we'll be diving
0:45
Speaker 2: deep into exactly how inheritances work. We'll be talking through
0:48
Speaker 2: tips for managing large sums of money, and we'll be
0:51
Speaker 2: getting to the bottom of why things so often get
0:54
Speaker 2: sticky in this space, particularly when it comes to our
0:57
Speaker 2: loved ones and money. Is Georgia King, and joining me
1:02
Speaker 2: as always is financial advisor Victoria Devine. You deal with
1:06
Speaker 2: this topic and advise people on how to manage their
1:08
Speaker 2: inheritances often, so I'm keen to pick your brain. But
1:12
Speaker 2: before we get there, I know you wanted to start
1:15
Speaker 2: today's pod with a couple of words.
1:17
Speaker 3: Oh my gosh, yes, I absolutely did. I feel like
1:20
Speaker 3: this topic can go one of two ways. One way,
1:23
Speaker 3: you're like, oh my gosh, that's the biggest sum of
1:25
Speaker 3: money you've never had.
1:26
Speaker 1: Any experience within inheritance.
1:28
Speaker 3: Which if that's the case, you're very lucky to have
1:31
Speaker 3: not gone through that circumstance. I know that a lot
1:34
Speaker 3: of people will also see it as very privileged, which
1:37
Speaker 3: absolutely is, Like it's a very privileged thing to find
1:40
Speaker 3: yourself in a position where you're inheriting a whole heap
1:43
Speaker 3: of money. But the one thing that I want to
1:45
Speaker 3: I guess acknowledge, especially as a financial advisor who specializes
1:49
Speaker 3: in this space, I deal with lots of young people
1:52
Speaker 3: I guess you would say millennials, George, who get inheritances
1:55
Speaker 3: like that is my specialty as a financial advisor is
1:59
Speaker 3: dealing with large sums of money and investing it so
2:02
Speaker 3: that we can create more intergenerational wealth. But the one
2:05
Speaker 3: thing I think we really need to acknowledge here.
2:08
Speaker 1: Is that it's devastating. It's really hard.
2:11
Speaker 3: It is so hard to get an inheritance, and if
2:13
Speaker 3: you are in a situation where you're getting an inheritance,
2:16
Speaker 3: it definitely means that you've lost someone close to you,
2:20
Speaker 3: and that person means a lot, and it is it's
2:23
Speaker 3: really upsetting, and I think that a lot of people
2:25
Speaker 3: who haven't been in that situation will be like, oh
2:27
Speaker 3: my god, it's so lucky that you got x YZ.
2:31
Speaker 3: But what you don't know is that that person would
2:34
Speaker 3: trade all of that money or all of the things
2:36
Speaker 3: that they've inherited to get that loved one back in
2:38
Speaker 3: a heartbeat. Like that is exactly what everybody would want,
2:42
Speaker 3: But it's also a space where people.
2:45
Speaker 1: Feel a lot of guilt.
2:46
Speaker 3: George, Yeah, people feel a lot of guilt. And a
2:49
Speaker 3: lot of what I do around inheritances is not necessarily
2:53
Speaker 3: just the investing like that part, George is really easy,
2:56
Speaker 3: but it's about honoring the person that has passed away
2:59
Speaker 3: and make it sure that you're putting that money to
3:01
Speaker 3: work so that it is working as hard as your
3:04
Speaker 3: loved one.
3:05
Speaker 1: Did for it.
3:06
Speaker 3: And I just feel like when we talk about inheritances,
3:09
Speaker 3: a lot of people are like, oh my god, so privileged. Yep,
3:11
Speaker 3: got that completely understand, absolutely privileged.
3:14
Speaker 1: Let's put that to the side.
3:16
Speaker 3: But the next big thing when it comes to inheritance
3:18
Speaker 3: is really acknowledging that level of guilt and acknowledging that
3:22
Speaker 3: do you know what, I don't wish an inheritance on anybody,
3:25
Speaker 3: Like if you've got an inheritance because your mom passed away.
3:29
Speaker 1: I want my mom. I don't want my inheritance.
3:31
Speaker 3: I want that And do you know what, it's a
3:33
Speaker 3: very lucky position to be in. I totally, but do
3:36
Speaker 3: you know what, it is a very interesting position to
3:39
Speaker 3: find yourself in. But the important thing about in inheritance
3:42
Speaker 3: is honoring the person that gave you that inheritance, because
3:45
Speaker 3: they're giving it to you because they can't be there anymore.
3:48
Speaker 3: So it's to them, I guess the next best thing
3:52
Speaker 3: to being with you. And from my perspective as an advisor,
3:56
Speaker 3: we need to acknowledge that first. Like George, if something
3:58
Speaker 3: happened and you found your self in a position where
4:00
Speaker 3: you're getting an inheritance, it's not wow.
4:03
Speaker 1: Ge how much was it? It's wow, g how do
4:05
Speaker 1: you feel? Yeah, you're okay?
4:07
Speaker 3: Like there's often a lot of semantics that sit around
4:10
Speaker 3: in inheritance, Like it might be very clean cut, like
4:12
Speaker 3: you knew what was coming, someone had been very sick
4:15
Speaker 3: for a very long time, or had been very old
4:17
Speaker 3: and had this really great life and had a really
4:20
Speaker 3: good innings and you've got no problems about it.
4:23
Speaker 1: But you know, there's a lot of money there. But
4:25
Speaker 1: then on the flip side, there.
4:27
Speaker 3: Are situations where one day you might get a call
4:29
Speaker 3: and dad that you haven't spoken to in fifteen years
4:32
Speaker 3: has passed away, and their lawyer's calling you to tell
4:35
Speaker 3: you that you're the next of kin and you're inheriting
4:37
Speaker 3: their money. And that can be a really fickle position
4:40
Speaker 3: to find yourself in because you're like, wow, like I
4:44
Speaker 3: didn't talk to him, I didn't have anything to do
4:47
Speaker 3: with him. Why am I getting all of his inheritance
4:49
Speaker 3: or why am I getting his life insurance or whatever
4:52
Speaker 3: it is. But I think it's really important to work
4:54
Speaker 3: through that first. And for a lot of people, I
4:57
Speaker 3: feel like they think an advisor is a really good
4:59
Speaker 3: place to start. I mean, I'm going to be a
5:01
Speaker 3: bit biased, George, my background's in psychology, I reckon I'm a.
5:04
Speaker 1: Pretty good place to start.
5:05
Speaker 3: Yeah, definitely, But I genuinely think that sometimes just putting
5:09
Speaker 3: that money to the side for a few months while
5:11
Speaker 3: you get your mental health sorted and you talk to
5:13
Speaker 3: a therapist about what you want to do is going
5:16
Speaker 3: to mean that you make better investment decisions in the
5:18
Speaker 3: long term. It's definitely not about just quick seeing advisor
5:22
Speaker 3: get investing. Really quickly, like you're not making it work.
5:25
Speaker 3: Like if the worst thing you do is put that
5:27
Speaker 3: money to the side and don't make any decisions on
5:29
Speaker 3: it for twelve months, that's a really good idea. But
5:33
Speaker 3: let's get into the show, because I feel like I
5:34
Speaker 3: could go on about this forever and ever, because as
5:37
Speaker 3: you know, Gee, this is I guess what.
5:38
Speaker 1: Would you call it, like a sweet spot. Yeah, it's
5:41
Speaker 1: just sweet spot.
5:42
Speaker 2: It's pure Elli, it's your wheelhouse.
5:44
Speaker 3: So I could talk about it literally all David, let's
5:47
Speaker 3: get into the show. I know you've got a whole
5:48
Speaker 3: heap of juicy questions for me, but I did want
5:51
Speaker 3: to just preface it with that because inheritances, I think
5:54
Speaker 3: can be often seen as very transactional, when from my
5:57
Speaker 3: perspective and my experience they are from that.
6:00
Speaker 2: Yeah, exactly right, So thank you for clarifying that. I
6:03
Speaker 2: think it is super important. In terms of today's show,
6:07
Speaker 2: I've kind of structured it so that the first half
6:09
Speaker 2: will be us talking through how they work, what things
6:12
Speaker 2: we need to be mindful of, and then we're going
6:14
Speaker 2: to go into actually how we go about managing that
6:18
Speaker 2: money effectively, as well as like properties stuff like that.
6:22
Speaker 2: So we kick us off with exactly how inheritances work?
6:26
Speaker 3: All right, ge, So when we pass away, So say
6:28
Speaker 3: we passed away yesterday, all of our things are left
6:31
Speaker 3: to our loved ones, which, if we're super organized, we've
6:34
Speaker 3: spoken to someone like Lucy Percy, our state planning lawyer friend,
6:37
Speaker 3: and she's helped you to clearly outline a will and
6:40
Speaker 3: you have a detailed to date plan. So there's a
6:42
Speaker 3: whole heap of clarity when it comes to where your
6:44
Speaker 3: assets are going. Just to side note g Because someone
6:47
Speaker 3: mentioned this to me the other day. They're like, why
6:49
Speaker 3: did you say if we passed away yesterday. That's a
6:53
Speaker 3: weird thing to say.
6:54
Speaker 1: I was like, yeah, it is. I wouldn't want to
6:56
Speaker 1: like say, gee.
6:57
Speaker 3: If you passed away tomorrow, Like yeah, that just feels like, well,
7:01
Speaker 3: what if that happened? Like it just feels like that's
7:04
Speaker 3: very futuristic, like whereas you didn't pass away yesterday.
7:07
Speaker 1: So it's a very easy hypothetical. Yeah, there's it's like
7:09
Speaker 1: a hypothetical.
7:10
Speaker 3: There's no like wishful thinking in it by any stretch
7:13
Speaker 3: of the imagination. And I feel like when we're talking
7:15
Speaker 3: about people passing away, which unfortunately, as an advisor I
7:19
Speaker 3: talk about.
7:19
Speaker 1: All the time.
7:21
Speaker 3: My examples are often past tense instead of future tents,
7:25
Speaker 3: and really that's a bit more of a respectful way
7:28
Speaker 3: to have a conversation about that. I know that that's
7:30
Speaker 3: a really weird side note.
7:32
Speaker 1: But no, that's interesting, is that Actually? Yeah, I will.
7:35
Speaker 2: I mean, you use that with your clients, So it's
7:37
Speaker 2: it's interesting for us as listeners to kind of get
7:40
Speaker 2: some insight into that, because it doesn't make sense if
7:42
Speaker 2: you were like, gee, if you died tomorrow, that's extremely
7:45
Speaker 2: negative and you know, quite shocking and scary.
7:47
Speaker 3: Yeah, Like, I don't ever want that to be like
7:49
Speaker 3: wishful thing. I wonder if other advisors do that. If
7:52
Speaker 3: you are an advisor and you do that, please to
7:54
Speaker 3: hear me and let me know, because I don't like
7:56
Speaker 3: it's not it's not in our training or anything. It's
7:58
Speaker 3: just something that I've picked up on over time because
8:00
Speaker 3: I just feel more comfortable saying it that way. I
8:02
Speaker 3: don't know, but I just wanted to preface it because
8:05
Speaker 3: I noticed I said it. Then anyway, good next one. Gee,
8:09
Speaker 3: if we don't have a will, which we've spoken about before.
8:12
Speaker 3: We did an estate planning episode recently and we obviously
8:15
Speaker 3: know how important it is to have a will, and
8:17
Speaker 3: if you don't know, or you haven't listened to that episode,
8:20
Speaker 3: please do. It is a really important episode. We also
8:23
Speaker 3: did want a little while ago Gee with Lucy Percy,
8:25
Speaker 3: who's an estate planning lawyer, and she is brilliant, like
8:28
Speaker 3: she she actually works with my clients, like she's not
8:31
Speaker 3: just a random estate planning lawyer that I know. She
8:33
Speaker 3: quite literally does most of my client's estate plans, and
8:37
Speaker 3: she is a wizard. But if we pass away and
8:41
Speaker 3: we don't have a will, all of our assets, if
8:43
Speaker 3: we have a spouse, will be past to our spouse,
8:46
Speaker 3: and then if there's no spouse, it will go to
8:48
Speaker 3: our children. And if you don't have a children, it'll
8:51
Speaker 3: go on from there to any living relatives left. But
8:54
Speaker 3: if you die without a will, we're is called dying intestate,
8:58
Speaker 3: which I think is really interesting because you often hear
9:00
Speaker 3: these terms thrown around.
9:02
Speaker 1: And you're like, what is interesting.
9:03
Speaker 3: It means you die and you don't have a will,
9:05
Speaker 3: but the state absorbs your assets and then they look
9:09
Speaker 3: for the next of kin, and if they don't, all
9:11
Speaker 3: goes to the government, which is a very fun thing
9:13
Speaker 3: to think about. Because I don't think many people are like, well,
9:15
Speaker 3: what happens if you can't find someone to give my
9:17
Speaker 3: stuff to? However, inheritances do come in many different shapes
9:21
Speaker 3: and sizes. Just because you hear the word inheritance doesn't
9:24
Speaker 3: mean someone has gotten a million dollars in hot hot cash.
9:28
Speaker 3: It could be a property, it could be interest on
9:31
Speaker 3: super You might inherit someone's cash or cuz or some
9:34
Speaker 3: sentimental possessions, or maybe g some things that you don't want,
9:38
Speaker 3: those heaps of things that you can inherit. And IG
9:41
Speaker 3: have been very lucky historically to inherit some really special
9:44
Speaker 3: things from my grandparents.
9:45
Speaker 1: I have like some salad tongs that my grandma.
9:48
Speaker 3: Used that are silver, and I have a whole heap
9:50
Speaker 3: of like trinkets and jewelry and stuff that are really really.
9:53
Speaker 1: Special to me.
9:54
Speaker 3: So it's really important to also understand that an inheritance
9:57
Speaker 3: might not just be cash, because in my case, I
10:00
Speaker 3: didn't inherit cash or anything like that from grandparents because
10:03
Speaker 3: obviously that would have been divided up among the siblings.
10:06
Speaker 1: Or their kids.
10:07
Speaker 3: Yeah, direct children, so my parents, etc. But I ended
10:12
Speaker 3: up with some really special possessions. So if someone passes away.
10:15
Speaker 3: There are lots and lots of things to be divided
10:18
Speaker 3: up and organized, and you know, prioritized. It doesn't just
10:22
Speaker 3: mean that, Okay, George, you're going to end up with
10:24
Speaker 3: some cash.
10:24
Speaker 1: It could be an asset.
10:25
Speaker 3: It could be something really small but really sentimental. And
10:28
Speaker 3: to me, those things are some of my most important things.
10:31
Speaker 3: Like if my house was burning down, Jay, those are
10:33
Speaker 3: the things I would grab first.
10:35
Speaker 2: Yeah, after I'd grab my pets, pets, the solid tongues
10:38
Speaker 2: I love it.
10:38
Speaker 1: Pets and the salad tongues.
10:41
Speaker 2: Can you also inherit shares?
10:43
Speaker 3: You can inherit shares, And that's one thing that you
10:47
Speaker 3: need to be quite careful of because when it comes
10:49
Speaker 3: to shares and also property, you need to know the
10:52
Speaker 3: semantics of what's selling that asset means. And I've come
10:56
Speaker 3: into a few people before who are like, oh my gosh,
10:59
Speaker 3: I inherited the share portfolio.
11:01
Speaker 1: V need your help.
11:02
Speaker 3: Can we sit down and have a meeting. And I'm like, yeah,
11:04
Speaker 3: no problems, g sit down, let's have a chat. And
11:06
Speaker 3: they're like, I just want to sell it, not interested
11:08
Speaker 3: in shares at all. I'm like, Okay, no problems, let's
11:11
Speaker 3: calculate what that means in terms of tax implications. And
11:15
Speaker 3: you need to understand this because a lot of the time,
11:18
Speaker 3: if you're inheriting shares, they could have been owned for
11:21
Speaker 3: forty fifty plus years, which can you think of a
11:24
Speaker 3: compound interest on those shares over time? G very sexy,
11:29
Speaker 3: But when compound interest is involved and those things are
11:32
Speaker 3: increasing in value, you're very likely to have to pay
11:35
Speaker 3: capital gains tax, and we want to avoid that if possible,
11:40
Speaker 3: because often you might find yourself in a position where
11:42
Speaker 3: you're like, all right, so, g I don't really want
11:45
Speaker 3: to own shares, like this isn't what I want. It's
11:48
Speaker 3: not aligned to my values. But on the flip side,
11:51
Speaker 3: if I sell it, I'm up for a pretty hefty
11:53
Speaker 3: tax bill and I don't particularly want that. We're not
11:56
Speaker 3: just looking at what you want when it comes to
11:59
Speaker 3: an inheritance, also looking at what is in your best
12:02
Speaker 3: interest financially as well, because gee, if you have to
12:05
Speaker 3: give away half of the wealth to tax, do you
12:08
Speaker 3: want to get rid of it? Do you really want
12:09
Speaker 3: to do that or do we want to make a plan.
12:11
Speaker 1: That makes the most of it.
12:13
Speaker 2: Okay, and other age limits when it comes to inheritances,
12:18
Speaker 2: as well, in terms of cash and shares and properties.
12:20
Speaker 1: Yeah, there are.
12:22
Speaker 3: So if you're a kid and you're under the age
12:24
Speaker 3: of eighteen, you're very unlikely to be allowed to access
12:27
Speaker 3: any of the inherited wealth, Like you're not going to
12:29
Speaker 3: be allowed to manage a property if you're twelve. But
12:31
Speaker 3: when they turn eighteen, g then all of that changes
12:34
Speaker 3: and you're treated as an adult. Except Gee, if someone
12:38
Speaker 3: who's put in the will that they don't want you
12:40
Speaker 3: to access that until a certain age, So they might say,
12:42
Speaker 3: all right, young adults, pretty crazy. I want them to
12:46
Speaker 3: inherit my property, or I want them to inherit this cash,
12:48
Speaker 3: but I don't want them to be able to access
12:50
Speaker 3: it until they're twenty five or till they're thirty. And
12:53
Speaker 3: that's actually quite common, especially when people have larger amounts
12:57
Speaker 3: of wealth that they know are going to go to
12:59
Speaker 3: younger kids. Gee. There's also clauses that some people put
13:04
Speaker 3: into wills, like, all right, it'll go to my son,
13:07
Speaker 3: I don't want him to access it until he's twenty five.
13:10
Speaker 3: But when he turns twenty five, if he doesn't have
13:13
Speaker 3: any addiction issues and he's all well.
13:15
Speaker 1: And good, it can go to him.
13:16
Speaker 3: But if he is suffering from addiction issues, I don't
13:19
Speaker 3: want him to have access to a large amount of money.
13:21
Speaker 3: And the executor of the will is going to help
13:24
Speaker 3: organize all of this. But there are so many things
13:26
Speaker 3: and so much power that you have if you're writing
13:29
Speaker 3: a will, and I just don't.
13:30
Speaker 1: Think people understand.
13:31
Speaker 3: Like a lot of people just go, oh, inheritance, no problems.
13:35
Speaker 3: But I've got a couple of clients who I managed
13:37
Speaker 3: portfolios for and they're not allowed to access their portfolios
13:41
Speaker 3: yet because they're outlined that they can't have them until
13:43
Speaker 3: they're thirty. Really, a person who wrote the will wanted
13:46
Speaker 3: to make sure that they had established their own income
13:49
Speaker 3: streams and had a career and or started a career
13:52
Speaker 3: before they actually came into some significant wealth, which from
13:56
Speaker 3: their perspective is absolutely their wishes.
13:58
Speaker 1: And we are honoring.
13:59
Speaker 2: Those, yeah, one hundred percent. And with an executor, you
14:02
Speaker 2: just outline them in the will.
14:04
Speaker 1: Is that correct? Yeah, So you'll outline them in the
14:07
Speaker 1: will and they will know.
14:08
Speaker 3: And it could be someone that you know, or it
14:11
Speaker 3: could be someone like a financial advisor. So g For example,
14:15
Speaker 3: I've got a couple of clients where they've got a boyfriend,
14:18
Speaker 3: but they're not that close with the boyfriend yet, like
14:20
Speaker 3: it's a pretty fresh relationship, and both of their parents
14:23
Speaker 3: aren't around anymore, and they just didn't have someone to.
14:26
Speaker 1: Be the executor.
14:27
Speaker 3: And I'm actually the executor of rail, so you can
14:30
Speaker 3: nominate someone who is a professional executor. But in that circumstance,
14:34
Speaker 3: we'd also build into the will some fees and stuff
14:38
Speaker 3: like that. So when I'm working on that, then I
14:40
Speaker 3: will get paid from the state, which is from my
14:43
Speaker 3: perspective again, quite interesting, and I don't think that a
14:46
Speaker 3: lot of people consider that. They're like, oh, wow, I
14:48
Speaker 3: could just have my financial advisor do that.
14:50
Speaker 2: Yeah, And I mean financial advisors would presumably make very
14:54
Speaker 2: good decisions with the finances, so smart thing to do there.
14:58
Speaker 2: We've touched on this in the past, but let's go
15:02
Speaker 2: over it again. If someone you love, say your mum,
15:07
Speaker 2: for example, they sadly passed away yesterday and they left
15:12
Speaker 2: all of their wealth, all of their millions to the
15:15
Speaker 2: Lost Dogs Home, happens, Yeah, so can you dispute that
15:19
Speaker 2: if you think perhaps you deserve that's.
15:22
Speaker 1: A money yes and no.
15:24
Speaker 3: G There are a couple of things around that, and
15:26
Speaker 3: it depends on how I guess comprehensive they will in
15:29
Speaker 3: a state planning, you know, process was and if they've
15:32
Speaker 3: gone and seen a Laura and set all of that up,
15:33
Speaker 3: it's very likely that you might not be able to
15:37
Speaker 3: argue it. And I find it super interesting because I
15:40
Speaker 3: actually did have a situation. It wasn't me personally, it
15:42
Speaker 3: was another advisor that I used to work with. They
15:45
Speaker 3: had someone whose mother actually left I think it was
15:48
Speaker 3: like ninety percent of her wealth to the Lost Dogs
15:50
Speaker 3: Home and ten percent to the kids, and the kids
15:53
Speaker 3: were like, what the hell. They didn't know that that
15:56
Speaker 3: was the case until the mother passed away, because it
15:58
Speaker 3: was just in a will and that was her business.
16:00
Speaker 3: And you don't actually have to tell someone what is
16:03
Speaker 3: in your will unless you want to. Obviously, you're going
16:06
Speaker 3: to have to tell people if they're the executor of
16:08
Speaker 3: a will. But gee, if I leave you any money
16:10
Speaker 3: in my will, I don't have to tell you about
16:12
Speaker 3: that because I might change my mind later, who knows. Obviously,
16:15
Speaker 3: if it is completely leak proof, then you don't have
16:18
Speaker 3: a lot of wigal room. But according to Victoria Legal eight,
16:21
Speaker 3: if the person who made the will didn't have the
16:23
Speaker 3: capacity to make the will at the time they signed it,
16:25
Speaker 3: you could challenge it.
16:27
Speaker 1: Or if the will.
16:28
Speaker 3: Wasn't drafted and signed according to law, like there might
16:31
Speaker 3: be a little bit of a loophole if you're like, oh,
16:33
Speaker 3: like it was on the back of a napkin line, right,
16:35
Speaker 3: Probably probably not, so it needs to be the proper
16:39
Speaker 3: legal process. Or if one of the witnesses of the
16:42
Speaker 3: will are set to inherit something in the wheel, So
16:46
Speaker 3: that is an interesting loopholes. You might just be helping
16:49
Speaker 3: a mate out by signing it, but also creating a
16:51
Speaker 3: loophole of someone being.
16:52
Speaker 1: Able to challenge it.
16:53
Speaker 3: Yeah, it can be challenged if you were making the
16:55
Speaker 3: will under the influence of others. So for example, we've
16:58
Speaker 3: had situations and thankfully not with any of my clients,
17:01
Speaker 3: but you know, I have a lot of financial advisor
17:04
Speaker 3: friends where you know, maybe the kids are asking the
17:07
Speaker 3: parents to update the will while they're not well in
17:09
Speaker 3: hospital and they know what they're doing. Could be challenged then.
17:13
Speaker 3: Or if a person had a responsibility to provide for
17:16
Speaker 3: someone and they don't believe that they've left their fair
17:18
Speaker 3: share to that person. So for example, if they had
17:21
Speaker 3: kids under the age of eighteen and they've left absolutely
17:24
Speaker 3: nothing to that side of the family, and the kids
17:27
Speaker 3: still have school fees and the cost of putting roof
17:30
Speaker 3: over their head and stuff, and it's gone to maybe
17:32
Speaker 3: they're lack young mistress or something like. You could definitely
17:36
Speaker 3: challenge the will in that circumstance to say, did you
17:39
Speaker 3: know that they actually had kids that they needed to
17:41
Speaker 3: provide for? And that's probably not the most ethical of outcomes. However,
17:45
Speaker 3: if someone has gone to the trouble of making sure
17:48
Speaker 3: they have a watertight will, I also feel like sometimes
17:52
Speaker 3: it's not worth challenging, not not worth, but we need
17:56
Speaker 3: to also understand that, you know, you might not be
17:59
Speaker 3: getting what you wanted, g Like, you might feel like
18:02
Speaker 3: you're entitled to something. But I also think that when
18:05
Speaker 3: we go through a process like this, we need to
18:06
Speaker 3: check our entitlement a little bit and go what if
18:09
Speaker 3: their wishes are being completely fulfilled? Like a will is
18:13
Speaker 3: the wishes of someone who has passed away, and it
18:15
Speaker 3: speaks for that person when they're not able to speak
18:17
Speaker 3: for themselves anymore. And I just feel like sometimes I've
18:21
Speaker 3: seen situations where people are challenging wills and I'm like, mm,
18:24
Speaker 3: they really wanted that and not.
18:25
Speaker 1: To get I guess too personal.
18:27
Speaker 3: But I have had situations where, you know, someone might
18:30
Speaker 3: have left all their money to the Lost Dogs Home
18:32
Speaker 3: and not to any of their adult children, and they've
18:35
Speaker 3: made that decision because their adult children weren't looking after
18:38
Speaker 3: them and they you know, maybe had really disconnected relationships
18:41
Speaker 3: and they hadn't talked to their kids in ten plus years,
18:43
Speaker 3: and they're like, do you know what, I don't want
18:45
Speaker 3: them to have that money. They don't have anything to
18:46
Speaker 3: do with me. And I often feel a little bit
18:49
Speaker 3: is the word iky like, when you hear that they're
18:52
Speaker 3: challenging a will and I'm like, well, you didn't even
18:54
Speaker 3: look after your mouth the last twenty years, but now
18:56
Speaker 3: you want to know. Oh. I don't know. I'm a
18:59
Speaker 3: big opinion on this, But at the same time, I
19:01
Speaker 3: think it's all about respect and making sure we're respecting
19:04
Speaker 3: the person that's passed away as well as you who
19:07
Speaker 3: is potentially inheriting something.
19:08
Speaker 2: Yeah, for sure, if anyone is interested in wills and
19:12
Speaker 2: all of that kind of thing. We did do an
19:14
Speaker 2: episode as you flagged earlier, V, so definitely go back
19:17
Speaker 2: and have a listen to that one. You also mentioned
19:20
Speaker 2: the tax implications briefly, V yes, sir, what's the goal there?
19:26
Speaker 2: Like what types of inheritance do we need to pay
19:29
Speaker 2: tax on? How does that work, what does it look like?
19:31
Speaker 3: So this is where you probably should get some advice.
19:33
Speaker 3: Like if you're inheriting a large sum of money and
19:36
Speaker 3: you need some advice, I definitely would get it because
19:38
Speaker 3: you don't want to get bitten.
19:39
Speaker 1: With it later.
19:40
Speaker 3: But in Australia, g you'll be very happy to know
19:42
Speaker 3: there aren't any inheritance or estate taxes, which is kind
19:45
Speaker 3: of cool. But as I said before, there might be
19:48
Speaker 3: some tax obligations that you need to meet depending on
19:51
Speaker 3: exactly what you inherit. So for example, as we were
19:54
Speaker 3: talking about before, capital gains tax, like you might need
19:57
Speaker 3: to pay capital gains tax if you inherit a property
20:00
Speaker 3: and then sell it, but there are some exemptions to that.
20:03
Speaker 3: So for example, I know that if you sell it
20:05
Speaker 3: within the first two years, there might not be tax
20:08
Speaker 3: payable on that, But if you sell it after that
20:10
Speaker 3: two years but it was an inherited asset, you do
20:13
Speaker 3: have to pay capital gains tax. I would be going
20:16
Speaker 3: on to the ATO website and checking that because they
20:18
Speaker 3: do have a really good detailed summary of what that
20:21
Speaker 3: looks like. But I also think that it is really
20:23
Speaker 3: important to understand that even if you're in the middle
20:27
Speaker 3: of a grieving process, like as I said before, George,
20:29
Speaker 3: it is not the worst thing to just park the
20:31
Speaker 3: money or park the asset to the side and out
20:34
Speaker 3: of sight, out of mind for a bit while you
20:36
Speaker 3: go through your grief period, which I think is really
20:38
Speaker 3: important because the last thing you need to do is
20:41
Speaker 3: be making decisions on money and making really big investment
20:45
Speaker 3: decisions when you're not in your right mind. And I
20:48
Speaker 3: feel like George, one of the biggest red flags for
20:51
Speaker 3: a financial advisor or anybody, right even if it's your
20:55
Speaker 3: uncle John, who's you know in your ear and going George,
20:57
Speaker 3: you need to see financial advisor asap.
21:00
Speaker 1: You don't.
21:01
Speaker 3: You absolutely don't just get through that period and be okay.
21:06
Speaker 3: But do know the limitations of it. So parking it
21:09
Speaker 3: for six to twelve months non issue. But if you
21:12
Speaker 3: have a property, we need to make sure that you're
21:14
Speaker 3: not missing out on something if you've got that two
21:17
Speaker 3: year limit. So for example, we don't want to pay
21:20
Speaker 3: capital gains tax when it comes to inheritance. I've had
21:22
Speaker 3: a lot of people say things like, oh v, I
21:24
Speaker 3: wish I'd known that earlier. So I think it's educate
21:27
Speaker 3: yourself and then park the money to the side, because
21:30
Speaker 3: we don't want to be in a fickle position.
21:32
Speaker 1: But that is just me.
21:34
Speaker 3: And then when it comes to g inherited shares, which
21:36
Speaker 3: you and I were talking about before, you're very likely
21:39
Speaker 3: to have to pay income tax on the dividends that
21:41
Speaker 3: are paid on those shares. And the same thing goes
21:43
Speaker 3: for property. If it is an income generating property like
21:47
Speaker 3: it is leased out and you have an income through
21:49
Speaker 3: having tenants in those properties, you're going to have to
21:52
Speaker 3: pay income tax on that because that was the obligation
21:54
Speaker 3: of the person who has now passed away. However, the
21:58
Speaker 3: sale of those assets is treated differently, so I would
22:01
Speaker 3: just be making sure that you're meeting your tax obligations
22:03
Speaker 3: and you know what applies to you. So if you're
22:05
Speaker 3: in that situation, have a chat to a financial advisor
22:08
Speaker 3: and they will make sure that you are doing the
22:09
Speaker 3: right thing. But as I said before, no need to
22:12
Speaker 3: jump on it. I guessap if you've just inherited.
22:15
Speaker 2: Something, Okay, before we head to the break fee, how
22:20
Speaker 2: important is it that we see a financial advisor. I'm
22:24
Speaker 2: assuming like the larger the sum of money or the
22:27
Speaker 2: larger the inheritance, probably the more likely it is that
22:31
Speaker 2: we should see an advisor just to make sure we
22:33
Speaker 2: are making the correct decisions. Is there like a monetary
22:37
Speaker 2: minimum that we should inherit before we see an advisor,
22:40
Speaker 2: Like if we're if we just in quotation marks inherit
22:43
Speaker 2: like ten grand or something compared to one hundred grand,
22:47
Speaker 2: they're very different sums of money. Should we see an
22:50
Speaker 2: advisor if it is that larger sum?
22:52
Speaker 3: Gee, I'm very pro advice obviously, and I do believe
22:56
Speaker 3: deeply in making sure that you get the right advice.
22:59
Speaker 3: But as you know, when it comes to financial advice,
23:02
Speaker 3: there are fees associated with that, and that could sit
23:05
Speaker 3: from anywhere between four to like eight thousand dollars. If
23:09
Speaker 3: you're talking about an inheritance advisory piece, like you're getting
23:12
Speaker 3: a statement of advice to make sure that that is okay. So,
23:14
Speaker 3: when it comes to inheriting, and you use the example
23:17
Speaker 3: of ten thousand dollars, going and seeing a financial advisor
23:20
Speaker 3: might not be a viable outcome for you because it's like, well,
23:24
Speaker 3: you've inherited ten grand, are you going to go and
23:26
Speaker 3: use half of that to pay the advisor for some advice,
23:30
Speaker 3: Like I just don't feel like that is putting you
23:31
Speaker 3: in the best financial position, which is why I'm such
23:34
Speaker 3: a strong advocate of self education and making sure that
23:37
Speaker 3: you know what your goals are and what that ten
23:39
Speaker 3: thousand dollars could do for you, and how you want
23:41
Speaker 3: to honor that and how you want to work with that.
23:44
Speaker 3: But when it comes to something like one hundred thousand
23:46
Speaker 3: dollars G, we have so much power, and a lot
23:51
Speaker 3: of people will do something like they'll go, all right, well,
23:54
Speaker 3: I got this inheritance, I'm going to spend it all
23:56
Speaker 3: on a property. And I mean, you're not going to
23:58
Speaker 3: spend one hundred thousand dollars G unfortunately and get a
24:01
Speaker 3: property and wham bam, you don't have any kind of
24:04
Speaker 3: debt associated with that. Like that could be a house
24:06
Speaker 3: deposit for you, which is really great, But we need
24:09
Speaker 3: to think of the implications of that. And I'm very
24:12
Speaker 3: aware that a lot of people who get large sums
24:14
Speaker 3: of money are often like, oh.
24:15
Speaker 1: My god, I could buy a house outright.
24:17
Speaker 3: But the thing there is, all right, gee, let's say
24:21
Speaker 3: you inherit half a million dollars, Like, do you know
24:23
Speaker 3: what I'm going to do.
24:24
Speaker 1: I'm going to go buy.
24:25
Speaker 3: A property completely outright, like money win right. But with
24:30
Speaker 3: that situation, you're putting yourself in a position where you're
24:33
Speaker 3: not generating cash flow. Like you might own the property
24:36
Speaker 3: out right, but you're still having to go to work
24:38
Speaker 3: every day to make sure that you're putting food on
24:40
Speaker 3: the table, and you don't have the luxury of I
24:42
Speaker 3: guess financial freedom in that way.
24:44
Speaker 1: Like, yes, you might own your property.
24:46
Speaker 3: Completely outright, and that's a very sexy option, but when
24:50
Speaker 3: it comes to inheriting money, I just don't think people
24:52
Speaker 3: see the power in that as much as I guess
24:55
Speaker 3: I do. And so say you inherit five hundred grand
24:59
Speaker 3: and instead of buying a property, gee, you go and
25:03
Speaker 3: invest that in the share market. And you're like, okay, well,
25:05
Speaker 3: I'm young, I've inherited this money. I'm going to invest
25:08
Speaker 3: it in the share market for the next thirty years
25:10
Speaker 3: and create financial freedom for myself over that time. You're
25:14
Speaker 3: going to put yourself in a position where that five
25:17
Speaker 3: hundred thousand dollars will turn into about four point seven
25:20
Speaker 3: million dollars. So if you own your property outright, today,
25:25
Speaker 3: is that going to generate four point seven million dollars
25:28
Speaker 3: for you in the future.
25:30
Speaker 2: Look into this climate maybe, look maybe maybe if you're
25:34
Speaker 2: buying in Sydney, but good luck buying a property in
25:36
Speaker 2: Sydney for half a million dollars.
25:38
Speaker 3: However, it's really important to understand the implications of the
25:42
Speaker 3: decisions you're making, George, because if you put that money
25:45
Speaker 3: in shares and invested that that's now generating you in income,
25:49
Speaker 3: and that income later down the track can buy you
25:52
Speaker 3: a property.
25:53
Speaker 1: So it's all about.
25:54
Speaker 3: Good financial planning and making sure that we're making the
25:56
Speaker 3: right decision for you, because often people will we'll just
26:00
Speaker 3: go all right, well, I'm just going to buy a
26:01
Speaker 3: property outright, and I go, oh my gosh, Like I
26:03
Speaker 3: can see how that makes a lot of sense, and
26:06
Speaker 3: you'd feel very gratified and properties aligned to your values.
26:10
Speaker 3: But are you making the right decision for future you?
26:13
Speaker 2: Okay, I think that is the perfect place to leave
26:16
Speaker 2: it for now. V. But on the other side of
26:18
Speaker 2: the break, we will be hearing your thoughts on what
26:21
Speaker 2: to do if you do receive a inheritance, and we'll
26:24
Speaker 2: also be running through the common mistakes that you see
26:27
Speaker 2: people make so don't go anywhere, guys, back into it. V.
26:32
Speaker 2: Let's get straight into the juicy stuff. Oh, I love
26:35
Speaker 2: the juicy stuff. If we are receiving a huge lump
26:39
Speaker 2: sum of money, how can we make the most of
26:42
Speaker 2: it and just not blow it?
26:44
Speaker 3: Well, first, I think it's about breathing and taking a
26:47
Speaker 3: step back from that money.
26:48
Speaker 1: As I said.
26:49
Speaker 3: Before, it is not the worst thing to put some
26:51
Speaker 3: time between you and your decision making.
26:54
Speaker 1: I feel like.
26:55
Speaker 3: People feel a lot of pressure when it comes to inheritances,
26:58
Speaker 3: and for good reason. It is a lot of money.
27:01
Speaker 3: It is life changing, and I feel like, you know,
27:02
Speaker 3: I touched on guilt earlier, a lot of people carry
27:05
Speaker 3: a lot of guilt for not doing something, going oh
27:06
Speaker 3: my gosh, I've got this amount of money or I've
27:08
Speaker 3: got this thing and I need to make the most
27:09
Speaker 3: of it, and I'm not making the most of it.
27:11
Speaker 3: And you're staying up at night really late, and you're
27:13
Speaker 3: not sleeping.
27:14
Speaker 1: Because of it.
27:14
Speaker 3: Like, be kind to yourself. It is hard, it is
27:17
Speaker 3: not easy. I think that if you've never been in
27:20
Speaker 3: that position, you are in no position to judge someone
27:22
Speaker 3: who is going through that. So I think that giving
27:26
Speaker 3: yourself space to grieve and to process that, and to
27:29
Speaker 3: even just step back and pretend the money doesn't exist
27:32
Speaker 3: for a little bit and go, you know, what, what
27:34
Speaker 3: do I want from life? How is this going to work?
27:36
Speaker 3: Step back for a little bit, g and have a
27:38
Speaker 3: think about life.
27:39
Speaker 1: You know, you're in a relationship, you're really young.
27:42
Speaker 3: Do you want to get married? Do you want to
27:43
Speaker 3: have kids at some point?
27:44
Speaker 2: Like?
27:44
Speaker 1: What are your views on property? Is that something you
27:47
Speaker 1: want to buy?
27:47
Speaker 3: Like what does retirement look like to you in the future,
27:51
Speaker 3: and how are you planning on achieving that? And then
27:54
Speaker 3: after you're clear on your goals and what you want
27:57
Speaker 3: to achieve, then go all right, now I've got this
28:00
Speaker 3: asset that could help me achieve all of those things
28:02
Speaker 3: that I know I want to achieve, Like, your goals
28:05
Speaker 3: don't have to change because you've got an inheritance. I
28:07
Speaker 3: feel like so often people like, oh my gosh, I
28:10
Speaker 3: didn't want property, but then I inherited something, and I
28:13
Speaker 3: guess I have to buy it now because I just
28:15
Speaker 3: have this mass amount of money. Like that's not the case,
28:18
Speaker 3: that's not true at all. So I think it's about
28:20
Speaker 3: not making hasty decisions and then getting some advice, whether
28:24
Speaker 3: that is doing some research on your own. So then
28:27
Speaker 3: the next step, George would be getting some advice and
28:29
Speaker 3: doing some research and making sure that you're making the
28:32
Speaker 3: most of it. Whether it is you know, five grand
28:34
Speaker 3: that you inherited and you just don't want it to
28:36
Speaker 3: go to waste, and maybe you're setting up a share
28:37
Speaker 3: portfolio for the very first time, or you are, you know,
28:41
Speaker 3: putting it into getting out of debt. I don't think
28:44
Speaker 3: that is a bad thing by any stretch of the imagination.
28:47
Speaker 3: Or if it's a larger sum of money or a
28:48
Speaker 3: house or a property, or a whole heap of shares
28:50
Speaker 3: or whatever it is, I would get some advice and
28:54
Speaker 3: create a plan and make sure that you are taking
28:57
Speaker 3: future you into consideration. Obviously a lot of people will
29:00
Speaker 3: be like, treat yourself, but I just don't want you
29:03
Speaker 3: to go overboard with that, because it's really like an
29:06
Speaker 3: inheritance is really about future you, and there's a lot
29:09
Speaker 3: of power in inheritances to create future wealth not just
29:13
Speaker 3: for you, but for your future children or your future families.
29:16
Speaker 3: And I just feel like it's so easy to have
29:19
Speaker 3: money slip through your fingers.
29:21
Speaker 2: Which leads me perfectly to my next question. Which is
29:25
Speaker 2: the common mistakes you do see people making when it
29:28
Speaker 2: comes to inheritances. I feel like people spending it too quickly.
29:32
Speaker 2: It would probably be at the top of the list.
29:35
Speaker 3: Yes, absolutely, people do funny things when they're going through grief.
29:39
Speaker 3: G Yeah, I have seen a lot of people like
29:42
Speaker 3: a lot of money on fire because they are going
29:46
Speaker 3: through the throes of grief and they are not processing
29:49
Speaker 3: things properly, and they feel like maybe spending money is
29:52
Speaker 3: going to help them feel better. Spoiler alert, Monney isn't
29:56
Speaker 3: going to make you happy. It is not going to
29:58
Speaker 3: bring the person that you lost back. It is not
30:01
Speaker 3: going to make you feel any better. My if you're
30:04
Speaker 3: spending it on going out for lunch with a friend,
30:06
Speaker 3: or you know, doing something for yourself, which is obviously
30:10
Speaker 3: very important. But people do have a tendency when they
30:13
Speaker 3: get large lump sums of money to burn through it. Obviously,
30:18
Speaker 3: as I said, small indulgences here and there are not
30:21
Speaker 3: the worst thing to do. In fact, I encourage them, Georgia.
30:24
Speaker 3: But if you're finding yourself in a position where all
30:27
Speaker 3: of a sudden you can create financial freedom, or pay
30:30
Speaker 3: off your debts or contribute to a deposit make sure
30:34
Speaker 3: that that is the right thing to be allocating that
30:36
Speaker 3: money towards, because sometimes what looks like the most logical
30:41
Speaker 3: answer is actually not the best financial answer.
30:46
Speaker 2: Okay, any other common mistakes you see.
30:48
Speaker 3: Oh my gosh, gee, there are heaps. The next one
30:51
Speaker 3: I feel like I've touched on throughout this entire episode,
30:53
Speaker 3: and that's making decisions while you're grieving and then regretting
30:56
Speaker 3: them because you felt either pressure to do it because
30:58
Speaker 3: Uncle John told you that you had to X Y Z,
31:02
Speaker 3: and you just felt a lot of pressure to make
31:04
Speaker 3: a decision. From my perspective, don't try to rush any
31:07
Speaker 3: type of decision, especially if you are particularly close to
31:11
Speaker 3: the person who has passed away. You have time take it,
31:14
Speaker 3: use it. It is your time to use. Another one
31:17
Speaker 3: is letting money get in the way of things that
31:19
Speaker 3: are important, like your relationship with your family. So often
31:24
Speaker 3: with inheritances, we let it get in the way of
31:28
Speaker 3: our loved ones, We let it get in the way of,
31:30
Speaker 3: you know, relationships that we've always held really close to ourselves.
31:34
Speaker 3: And when the topic of inheritances come up, it often
31:37
Speaker 3: gets really sticky, it gets really dramatic. People argue like
31:42
Speaker 3: money is the one thing that can completely divide a family.
31:46
Speaker 3: You know, you might have had a very close family
31:48
Speaker 3: and then a grandparent passes away and all of that
31:51
Speaker 3: dissolves because they can't get on the same page. So
31:54
Speaker 3: I think it's really important to remember who you are
31:57
Speaker 3: and what your values are. And as much as money
32:00
Speaker 3: is obviously something that can create wealth and freedom, I
32:03
Speaker 3: just think we need to not forget what is important
32:06
Speaker 3: and you need to know that you can be the
32:08
Speaker 3: bigger person. And it doesn't need to be dramatic. It
32:11
Speaker 3: can be very non emotional. But if you're going through that,
32:14
Speaker 3: I recommend getting some advice or talking to someone about
32:18
Speaker 3: that because it can be really, really hard.
32:21
Speaker 1: Gee, I have two more.
32:23
Speaker 3: The next one I have for you is not getting
32:25
Speaker 3: financial advice when you need it. So often people just go, oh,
32:28
Speaker 3: I don't need it, like it's not worth it. At
32:31
Speaker 3: the end of the day, if you're inheriting a really
32:33
Speaker 3: large sum of money, get some advice. If you don't
32:35
Speaker 3: take it, that's cool, but I promise you getting advice
32:38
Speaker 3: will make sure that you are making the right decision,
32:41
Speaker 3: whether you decide to invest in shares or just not
32:43
Speaker 3: do anything. And then the last one is something that
32:47
Speaker 3: I feel like I would do, Like I feel like
32:50
Speaker 3: I would just be incredibly generous. And I know that
32:54
Speaker 3: I guess that sounds like I've got lots of tickets
32:56
Speaker 3: on myself, and I promise you I don't. That is
32:58
Speaker 3: not the case at all. Just really like looking after
33:01
Speaker 3: other people, and I really like making sure other people
33:04
Speaker 3: are okay. And some people seem to think that they're
33:07
Speaker 3: Oprah when inheritances come up, Like you get a thousand
33:11
Speaker 3: dollars and you get a thousand dollars in ge you'll
33:13
Speaker 3: pay off your credit card. But I think it's important
33:17
Speaker 3: to make a plan for your money before going around
33:19
Speaker 3: and handing it out, because obviously there is a lot
33:22
Speaker 3: of power in a very large sum of money, but
33:24
Speaker 3: that power is going to diminish if you start giving
33:27
Speaker 3: it away or trying to help absolutely everybody with it. Like,
33:30
Speaker 3: obviously generosity is really important and I am all for it,
33:34
Speaker 3: but I think that we need to put ourselves first
33:36
Speaker 3: in this situation. And just because you can help somebody,
33:40
Speaker 3: I know it sounds terrible, doesn't mean you should be
33:42
Speaker 3: doing it.
33:43
Speaker 2: George, Yeah, it's tempting. Its yeah, okay, as we flagged
33:50
Speaker 2: before you do have a background in psychology. Do you
33:54
Speaker 2: think there is a tendency to view inherited money as
33:59
Speaker 2: bonus money almost, and then therefore not treat it as
34:03
Speaker 2: cleverly as we could.
34:04
Speaker 1: Yeah, me through that?
34:05
Speaker 2: What is that?
34:06
Speaker 1: Well, it's not mine. I didn't earn it.
34:09
Speaker 3: I can do whatever I want with it. I'm going
34:11
Speaker 3: to buy a boat with my inheritance. I deserve it.
34:14
Speaker 3: I've worked hard.
34:15
Speaker 1: All my life.
34:16
Speaker 3: I totally get it. And you know what, if that's
34:18
Speaker 3: what you want to do. I am so not judgmental
34:21
Speaker 3: with the way people spend money, George. I have seen
34:23
Speaker 3: it all. I have been involved in interactions where people
34:27
Speaker 3: are talking about buying maseratis for their mistresses, and I
34:31
Speaker 3: could not care less. It is not my money, not
34:35
Speaker 3: my circus, not my monkeys. My job as a financial
34:38
Speaker 3: advisor is to help you make the best decision for you,
34:41
Speaker 3: and if buying a maserati, George for your mistress is
34:44
Speaker 3: the best financial decision for you, let me help you
34:48
Speaker 3: do that properly.
34:49
Speaker 2: Okay.
34:50
Speaker 3: Obviously, Georgia, that one question to my ethics a fair
34:53
Speaker 3: bit and wasn't aligned to who I am as a
34:55
Speaker 3: financial advisor, which is why I now have my own
34:58
Speaker 3: financial advisory practice, and I do whatever I want and
35:00
Speaker 3: see the clients.
35:01
Speaker 1: That nourish me.
35:03
Speaker 3: However, a lot of people will see an inheritance as
35:05
Speaker 3: bonus money. But what we really need to see it
35:08
Speaker 3: as is an opportunity. It is an opportunity to put
35:11
Speaker 3: future you ahead, is an opportunity to make sure that
35:14
Speaker 3: your life is completely sustainable and we are working towards
35:18
Speaker 3: financial freedom. Like obviously, inheritance could mean anything, and it
35:22
Speaker 3: could mean five hundred dollars or it could mean five
35:26
Speaker 3: million dollars. However, I think whatever it is, I just
35:30
Speaker 3: don't want you to treat it as bonus money. It
35:32
Speaker 3: needs to be respected.
35:33
Speaker 1: It's not money that you won. It's money that.
35:36
Speaker 3: Somebody worked incredibly hard to earn and now they're sharing
35:41
Speaker 3: it with you. And that, to me, is not a bonus.
35:44
Speaker 3: It is not something that you just throw down the drain.
35:47
Speaker 3: From my perspective, inheritances need to be respected, and that's
35:52
Speaker 3: I guess the premise I have, like every time I
35:55
Speaker 3: speak to a client, it is about making sure that
35:58
Speaker 3: we are respecting that money and we are respecting the
36:01
Speaker 3: person who earned it. Because you guys should know by now,
36:04
Speaker 3: money is hard to earn, hard to keep, and if
36:07
Speaker 3: we have it, we should respect it.
36:09
Speaker 2: Yeah, for sure, And I feel like that would help
36:11
Speaker 2: relieve some of that inheritance Gill that you spoke about
36:14
Speaker 2: before as well the money, as we touched on before. Again,
36:19
Speaker 2: isn't the only thing that people can inherit. What are
36:22
Speaker 2: your thoughts on what we should do with inherited property?
36:25
Speaker 3: Oh my gosh, there are so many, so, so many
36:29
Speaker 3: options And there's no quote answer to this. Yeah, there's
36:33
Speaker 3: no like, oh, well, good, good question. Gee. People who
36:37
Speaker 3: inherit property should do X. Like there's no one size
36:40
Speaker 3: fits all approach to this. A lot of people who
36:42
Speaker 3: inherit property might actually be inheriting a really sentimental property
36:46
Speaker 3: which is very hard to part with. It might be
36:49
Speaker 3: the family home that you grew up in.
36:50
Speaker 1: It might be.
36:51
Speaker 3: A holiday house that you have incredibly fond memories of
36:56
Speaker 3: and you've spent a lot of time there and you
36:57
Speaker 3: want to hold onto it for your kids and your future.
37:00
Speaker 3: And that's amazing. And as we've seen over the last
37:03
Speaker 3: twelve months in particular Georgia, property is pretty good investment,
37:07
Speaker 3: not bad to SS. But we also need to make
37:10
Speaker 3: sure that we're making the right decision for us. Other people,
37:13
Speaker 3: they might not feel tied to it at all. They
37:15
Speaker 3: might want to sell it, they might want to get
37:16
Speaker 3: rid of it. They might want to hold on to
37:18
Speaker 3: it as an asset and lease it out or put
37:20
Speaker 3: it on Airbnb, or do something else with it. I
37:23
Speaker 3: guess the part that gets really complicated is where multiple
37:27
Speaker 3: people are listed on an inherited property, and then people
37:30
Speaker 3: have conflicting ideas on what to do with that property. So,
37:33
Speaker 3: for example, George, let's say we were siblings and we
37:36
Speaker 3: both inherit a property from our parents, and we're both
37:39
Speaker 3: in very different financial situations. Like you might be really
37:43
Speaker 3: financially comfortable, Like you and your partner, George, you're completely
37:46
Speaker 3: financially free, You've got really good incomes, you're not worried.
37:49
Speaker 3: That house is really sentimental to you, and you just
37:52
Speaker 3: want to keep it because you want to go, you know,
37:53
Speaker 3: use it as a holiday house, you know, once or
37:56
Speaker 3: twice a year.
37:57
Speaker 1: It's not of any consequence to you.
37:59
Speaker 3: But on the flips, I might be in a whole
38:02
Speaker 3: heap of debt, and to me that property is a
38:05
Speaker 3: ticket to getting out of debt and setting myself up well.
38:09
Speaker 3: And so we need to come to a conclusion that
38:12
Speaker 3: works for both of us, because you'd be in that
38:14
Speaker 3: position where you're like, well, V I want to keep it.
38:16
Speaker 3: You know, it means so much to me, what do
38:17
Speaker 3: you mean? And I go, well, that's the ticket for
38:20
Speaker 3: me to get out of debt and create financial freedom.
38:22
Speaker 3: And obviously from that perspective, it would be very hard
38:26
Speaker 3: to get on the same page. So if you can't
38:29
Speaker 3: come to an agreement, we might end up in court,
38:31
Speaker 3: which obviously ends up in usually having the property sold.
38:35
Speaker 3: It's never ever a cheap exercise. So if you can
38:37
Speaker 3: avoid it escalating to that, that would obviously be the
38:39
Speaker 3: recommended option. And there's obviously lots of options like I
38:43
Speaker 3: could sell my portion to you, Josh, or we could
38:46
Speaker 3: negotiate that over time, like there are lots of ways
38:49
Speaker 3: to do that, and I would be getting advice on it.
38:51
Speaker 3: But property can be quite dividing when one property gets
38:54
Speaker 3: inherited by multiple people.
38:56
Speaker 2: Yes, spy see, I did want to ask you a
38:59
Speaker 2: little bit more about family dynamics when it comes to inheritances,
39:02
Speaker 2: but I'm wary of the time. This has been quite
39:04
Speaker 2: a long episode, so I'm going to skip that question
39:08
Speaker 2: and finish with one that I think is extremely interesting,
39:13
Speaker 2: is it. Do you think vd that there is a
39:16
Speaker 2: danger in leaving your kids too much money? So celebs,
39:21
Speaker 2: for example, like Gordon Ramsey and Daniel Craig, they've been
39:26
Speaker 2: known to say in the past that they will not
39:27
Speaker 2: be leaving their incredible fortunes to their children. What's your
39:32
Speaker 2: take on that.
39:33
Speaker 3: Oh, this is such a spicy one because I'm so
39:37
Speaker 3: opinionated on this just because I'm like, that's.
39:40
Speaker 1: Not what I would do.
39:41
Speaker 3: But again, like it's their circus, it's their monkeys. They
39:45
Speaker 3: can do whatever they want. And I totally understand where
39:49
Speaker 3: someone like Gordon Ramsey is coming from because historically he
39:52
Speaker 3: said he wants his kids to work for their wealth
39:55
Speaker 3: and he wants them to go through the same I
39:57
Speaker 3: guess character cre eating process that he went through. And
40:02
Speaker 3: I totally get that. But I sit on both sides
40:05
Speaker 3: of the fence, right like, if you're not going to
40:07
Speaker 3: leave your fortune to your kids, where's it going? So
40:10
Speaker 3: I don't know where Daniel Craigil Gordon Ramsey are planning
40:13
Speaker 3: on putting their money, but it does have to go somewhere.
40:16
Speaker 3: Is it going somewhere? That means a lot to you.
40:18
Speaker 3: If that's the case, fantastic. If you're giving it away
40:21
Speaker 3: just so your kids have to work harder, I'm a
40:23
Speaker 3: bit on the fence about that, because with a good
40:26
Speaker 3: estate planner, with a really good will and estate plan
40:30
Speaker 3: behind you, that wealth can become whatever you want it
40:33
Speaker 3: to become, and you have the opportunity of creating generational wealth,
40:38
Speaker 3: like your inheritance or your family wealth is not just
40:42
Speaker 3: helping your kids. It could be helping you know, your
40:45
Speaker 3: kid's kids and your kids kids kids kids like it
40:48
Speaker 3: can create a legacy, and for me, legacy is so important.
40:53
Speaker 3: Like if you have the ability to make life better
40:57
Speaker 3: for others, especially others that you love, wouldn't you be
41:00
Speaker 3: doing that. So one of the things that you could
41:03
Speaker 3: do is, you know, say, okay, well we're not giving
41:05
Speaker 3: them a lump sum of money, but my entire inheritance
41:08
Speaker 3: will be invested, and the dividends from that investment will
41:11
Speaker 3: be divided among my kids as an income stream, so
41:14
Speaker 3: that they're never financially pressed. It might end up being
41:18
Speaker 3: you know, I'm sure this is not the case for
41:19
Speaker 3: Gordon Ramsey because he has lots of dollars gging, But
41:23
Speaker 3: I have situations where I've got clients and they have inheritances,
41:27
Speaker 3: and their inheritances are all invested and they get an
41:31
Speaker 3: income stream of like thirty grand a year from that investment.
41:34
Speaker 3: So all of the kids in the family all have
41:36
Speaker 3: thirty grand a year coming in. That would obviously take
41:40
Speaker 3: off some very significant financial pressure. Like imagine going through
41:44
Speaker 3: life knowing that at a base level you always had
41:47
Speaker 3: thirty thousand dollars a year coming in. It would mean
41:50
Speaker 3: that you are more likely to make good property decisions
41:52
Speaker 3: because you know you have that cash flow to fall
41:54
Speaker 3: back on even if you don't have a job.
41:56
Speaker 1: Means that you might.
41:57
Speaker 3: Be able to send your kids to a better school
42:00
Speaker 3: was in line with your values. Like for me, it's
42:02
Speaker 3: not necessarily about spoiling them with wealth, but having a
42:06
Speaker 3: structure that means they are supported because I'm just of
42:09
Speaker 3: the opinion that if I had the ability to support
42:11
Speaker 3: my kids in the future, I would want to. But
42:13
Speaker 3: I totally understand, you know Gordon Ramsay saying I want
42:17
Speaker 3: my kids to work for wealth. I don't want them
42:20
Speaker 3: to be spoilt. I want them to work, and I
42:22
Speaker 3: want them to have good work ethics. But I feel
42:24
Speaker 3: like with good advice you can achieve both.
42:27
Speaker 2: Yeah, interesting, I feel like that one. I feel like
42:30
Speaker 2: the listeners would probably be quite divided on that. I
42:33
Speaker 2: feel like it is totally.
42:35
Speaker 3: Unrelatable, Like how many times are you like, oh, well,
42:38
Speaker 3: we've got millions and millions and millions of dollars?
42:41
Speaker 1: What are we going to do with it?
42:42
Speaker 3: Like I totally get giving it to the Lost Dogs home,
42:45
Speaker 3: but what are you going to do with it? How
42:48
Speaker 3: are you creating your legacy? And something that is really
42:51
Speaker 3: important when it comes to inheritances for me is legacy,
42:55
Speaker 3: Like what are you leaving behind? What does that mean?
42:58
Speaker 3: What is your impact on the world, Because impacts so
43:01
Speaker 3: much more than money, Like how you made people feel
43:04
Speaker 3: is going to be the thing that they remember about you,
43:07
Speaker 3: not how rich you were. And yeah, it's time to
43:10
Speaker 3: wrap it up. Hopefully everyone got a little something out
43:14
Speaker 3: of today's episode. Now that we're at the end of
43:18
Speaker 3: it V, I'm thinking that maybe it would be worth
43:20
Speaker 3: us dedicating an episode to kind of class issues almost
43:26
Speaker 3: in a way, because I'm also imagining people are listening
43:28
Speaker 3: to this and thinking, yeah, well, I'm happy for Gordon
43:31
Speaker 3: Ramsey and Daniel Craig, but my kids aren't going to
43:34
Speaker 3: inherit millions, They would be lucky to inherit thousands. So
43:39
Speaker 3: I think that's kind of an interesting piece of this
43:41
Speaker 3: discussion that we haven't really had time to touch on today.
43:44
Speaker 3: It absolutely is there's so much privilege that plays into it,
43:47
Speaker 3: and I think class issues is something we need to
43:50
Speaker 3: discuss because there's also so many barriers to advice as well. Like,
43:56
Speaker 3: you know, someone like Gordon Ramsey is going to set
43:59
Speaker 3: his kids up for generational wealth and they won't have
44:01
Speaker 3: to worry ever again, and there's just so much privilege
44:04
Speaker 3: that plays into that. But someone who you know has
44:07
Speaker 3: never created wealth and they're not going to get an
44:09
Speaker 3: inheritance from their parents, and they're working their asses off,
44:12
Speaker 3: but their kids are still not going to inherit anything.
44:14
Speaker 3: Like I totally get that, and it comes down to
44:17
Speaker 3: me to legacy, like what you leave behind doesn't have
44:20
Speaker 3: to be financial. But you're right, we do really need
44:24
Speaker 3: to break down the class issues because obviously there's a
44:27
Speaker 3: lot of privilege in being able to access advice as well,
44:30
Speaker 3: which is why I do what I do, George, which
44:32
Speaker 3: is why we give away so much free advice and
44:34
Speaker 3: so many free resources on cheese on the money because
44:37
Speaker 3: I just want people to have access to the advice
44:40
Speaker 3: that I know wealthy people can afford. Yeah for sure.
44:44
Speaker 3: All right, let's wrap it anyway. Gee, that is all
44:47
Speaker 3: we have time for today. So before we head off,
44:49
Speaker 3: we'd like to acknowledge and pay respect to Australia's Aboriginal
44:53
Speaker 3: and torrest Rate islander people's. They're the traditional custodians of
44:57
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44:58
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45:02
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45:03
Speaker 3: The land on which we are able to learn. We
45:05
Speaker 3: pay our respects to elders past and present, and we
45:08
Speaker 3: share our friendship and our kindness.
45:10
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45:13
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45:16
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45:20
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45:40
Speaker 1: Okay, you You're getting better at.
45:41
Speaker 2: Those number two three off the tongue.
45:44
Speaker 3: See you next week, Guys by Guys,