Many parents like the idea of giving their children money while they’re alive to enjoy it — a “living inheritance.” But giving away large sums isn’t always straightforward, and it can affect your own financial security in retirement.
The appeal of a living inheritance
For some, it’s about helping children buy a home. For others, it’s about seeing their kids enjoy the money now, rather than waiting until later.
The risks to consider
- Centrelink impacts — large gifts may be counted as “deprived assets,” reducing your pension.
- Your own costs — once given, that money is gone. If you need it later (for health, housing, or aged care), it may not be available.
- Family expectations — once one child receives help, others may expect the same.
Balancing generosity and security
Before making big gifts, it’s important to understand how your financial position will look in the years ahead. Your lifestyle, health, and retirement living costs all need to be part of the equation.
Considerations
Generosity is wonderful, but your financial security comes first. By planning carefully, you can help your family while still ensuring your own needs are met.
