Inheritance Planning in Australia: Tips to Maximise Your Financial Wellbeing

Receiving an inheritance is a significant financial event—one that comes with both opportunities and responsibilities. It often arrives during an emotional time, following the loss of a loved one, making it even more important to approach your next steps with care.

At Forward Path Advisory, we understand the unique financial landscape Australian beneficiaries navigate. Whether your inheritance is a lump sum of cash, property, shares, or other assets, here’s how to ensure it supports your long-term financial wellbeing.

1. Pause and Reflect

The period following a loved one’s passing can be overwhelming. Before making any major financial decisions, allow yourself time to process the emotional side of this transition. Rushing into investments, spending, or reallocating assets too soon can lead to choices you may later regret.

2. Build Your Advisory Team

Managing an inheritance can involve financial advisors, legal, and tax complexities. Having the right professionals on your side ensures you make informed decisions:

• Financial Adviser – Helps align your inheritance with your broader financial goals.
• Tax Accountant – Provides insights into any tax obligations or benefits related to your inheritance.
• Estate Lawyer – Assists with legal aspects, ensuring compliance with Australian laws.

Working with experts who understand the Australian financial system can give you confidence and clarity in managing your inheritance wisely.

3. Know the Tax Implications

Australia does not have an inheritance tax, but that doesn’t mean your inheritance is tax-free. Certain assets—like property, shares, or managed funds—may be subject to capital gains tax (CGT) when you sell them. Understanding these tax rules early on can help you structure your financial plan efficiently and avoid unexpected tax liabilities.

4. Align Your Inheritance with Your Financial Goals

Rather than making impulsive financial moves, consider how this windfall fits into your broader wealth-building strategy. Some smart ways to utilise an inheritance include:

• Paying off debt – Reducing high-interest loans or mortgages can improve financial stability.
• Building an emergency fund – Having a buffer for unexpected expenses ensures peace of mind.
• Investing for growth – Whether through shares, property, or managed funds, investing can help you grow your wealth over time.
• Boosting superannuation – Making voluntary contributions to your super can provide tax advantages and enhance your retirement savings.

A structured approach ensures your inheritance works for you, not just in the short term, but for years to come.

5. Be Mindful of Lifestyle Inflation

A sudden increase in wealth can tempt you to upgrade your lifestyle—bigger house, new car, expensive holidays. While enjoying your inheritance is completely valid, it’s important to maintain financial discipline. Setting boundaries on spending and focusing on long-term financial security will help ensure your inheritance lasts.

6. Secure Your Own Legacy

Receiving an inheritance is also an opportunity to reflect on your own estate planning. Now is a good time to:

• Review or update your Will – Ensure your wealth will be distributed as per your wishes.
• Establish or update powers of attorney – Appoint someone you trust to manage your affairs if needed.
• Assess insurance coverage – Protect your assets with the right level of insurance.

By planning ahead, you can prevent unnecessary complications for your own beneficiaries in the future.

7. Honour the Legacy

For many, an inheritance is more than just financial—it’s a legacy left by a loved one. Consider how you might honour their memory in a way that reflects their values. This could be through charitable giving, investing in causes they cared about, or using the funds to create meaningful experiences for your family.

Final Thoughts

Navigating an inheritance doesn’t have to be overwhelming. With the right guidance, you can make informed decisions that align with your goals, secure your financial future, and honour the legacy you’ve received.

At Forward Path Advisory, we help clients turn their inheritance into a stepping stone for long-term financial success. If you’ve recently received an inheritance and need expert guidance, reach out to us—we’re here to help you make the most of this opportunity.