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

Episode Date: February 22, 2022

Terrifyingly, we are on the cusp of a mammoth intergenerational wealth transfer, with Boomers expected to leave behind $224 billion each year in inheritances by 2050 - THAT'S SO MUCH MONEY. So we need to start talking now about what this means and how it works, because whether you've inherited $500, or $5 million - showing that money the respect it deserves is really important. So join us, as we discuss a number of hypotheticals, and also talk about a number of real-life inheritance stories.See omnystudio.com/listener for privacy information.

She's on the money. She's on the money. Hello and welcome to She's on the money, the podcast for millennials who want financial freedom. We are on the cusp of a mammoth intergenerational wealth transfer, with boomers expected to leave behind $224 billion each year in inheritances by 2050. To make sure we're all as prepared as possible, today we'll be diving deep into exactly how inheritances work, we'll be talking through tips for managing large sums of money, and we'll be getting to the bottom of why things so often get sticky in this space, particularly when it comes to our loved ones and money. My name is Georgia King and joining me as always is financial advisor, Victoria Devine.

V, you deal with this topic and advise people on how to manage their inheritances often. So, I'm keen to pick your brain. But before we get there, I know you wanted to start today's pod with a couple of words. Oh my gosh. Yes, I absolutely did. I feel like this topic can go one of two ways. One way you're like, oh my gosh, that's the biggest sum of money. You've never had any experience with an inheritance, which if that's the case, you're very lucky to have not gone through that circumstance. I know that a lot of people will also see it as very privileged, which it absolutely is. Like it's a very privileged thing to find yourself in a position where you're inheriting a whole heap of money. But the one thing that I want to, I guess,

acknowledge, especially as a financial advisor who specializes in this space. I deal with lots of young people, I guess you would say millennials, George, who get inheritances. Like that is my specialty as a financial advisor is dealing with large sums of money and investing it so that we can create more intergenerational wealth. But the one thing I think we really need to acknowledge here is that it's devastating. It's really hard. It is so hard to get an inheritance. And if you are in a situation where you're getting an inheritance it definitely means that you've lost someone close to you and that person means a lot and it is it's really upsetting and I think that a lot of people who haven't been in that situation will be like oh my god it's so lucky

that you got xyz but what you don't know is that that person would trade all of that money or all of the things that they've inherited to get that loved one back in a heartbeat like that is exactly what everybody would want, but it's also a space where people feel a lot of guilt, George. People feel a lot of guilt. And a lot of what I do around inheritances is not necessarily just the investing. That part, George, is really easy, but it's about honoring the person that has passed away and making sure that you're putting that money to work so that it is working as hard as your loved one did for it. And I just feel like when we talk about inheritances, a lot of people like oh my god so privileged yep got that completely understand absolutely privileged

let's put that to the side yeah but the next big thing when it comes to inheritances is really acknowledging that level of guilt and acknowledging that do you know what I don't I don't wish an inheritance on anybody like if you've got an inheritance because your mum passed away I want my mum I don't want my inheritance I want that and do you know what it's a very lucky position to be in. But do you know what? It is a very interesting position to find yourself in, but the important thing about an inheritance is honoring the person that gave you that inheritance because they're giving it to you because they can't be there anymore. So, it's to them, I guess, the next best thing to being with you. And from my perspective as an advisor, we need to acknowledge

that first. Like, George, if something happened and you found yourself in a position where you're getting an inheritance. It's not, wow, gee, how much was it? It's, wow, gee, how do you feel? Are you okay? Like there's often a lot of semantics that sit around an inheritance. Like it might be very clean cut. Like you knew it was coming. Someone had been very sick for a very long time or had been very old and had this really great life and had a really good innings and you've got no problems about it, but you know, there's a lot of money there. But then on the flip side, there are situations where one day you might get a call and the dad that you haven't spoken to in 15 years has passed away and their lawyer's calling you to tell you that you're the

next of kin and you're inheriting their money. And that can be a really fickle position to find yourself in because you're like, wow, like I didn't talk to him. I didn't have anything to do with him. Why am I getting all of his inheritance or why am I getting his life insurance or whatever it is? But I think it's really important to work through that first. And for a lot of people, I feel like they think an advisor is a really good place to start. I mean, I'm going to be a bit biased, George. My background's in psychology. I reckon I'm a pretty good place to start. But I genuinely think that sometimes just putting that money to the side for a few months while you get your mental health sorted and you talk to a therapist

about what you want to do is going to mean that you make better investment decisions in the long term. It's definitely not about just quick, see an advisor, get investing really quickly, like you're not making it work like if the worst thing you do is put that money to the side and don't make any decisions on it for 12 months that's a really good idea but let's get into the show because I feel like I could go on about this forever and ever because as you know gee this is I guess my what would you call it like a sweet spot yeah it's your sweet spot it's right up your alley it's your wheelhouse so I could talk about it literally all day but let's get into the show I know you've got a whole heap of juicy questions for me but I did want to just preface it with that

because inheritances, I think, can be often seen as very transactional when, from my perspective and my experience, they are far from that. Yeah, exactly right. So, thank you for clarifying that. I think it is super, super important. In terms of today's show, I've kind of structured it so that the first half will be us talking through how they work, what things we need to be mindful of, and then we're going to go into actually how we go about managing that money effectively, as well as like properties, stuff like that. So, Bea, kick us off with exactly how inheritances work. All right, G. So, when we pass away, so say we passed away yesterday, all of our things are left to our loved ones, which if we're super organized, we've spoken to someone like Lucy

Percy, our estate planning lawyer friend, and she's helped you to clearly outline a will and you have a detailed estate plan. So, there's a whole heap of clarity when it comes to where your assets are going. Just a side note, G, because someone mentioned this to me the other day, they're like, why did you say if we passed away yesterday? That's a weird thing to say. And I was like, yeah, it is. I wouldn't want to like say, gee, if you passed away tomorrow, like that just feels like, well, what if that happened? Like, it just feels like that's very futuristic. Like, whereas you didn't pass away yesterday. So, it's a very easy example. Yeah. It's like a hypothetical. There's no like wishful thinking in it by any stretch of the

imagination. And I feel like when we're talking about people passing away, which unfortunately, as an advisor, I talk about all the time. My examples are often past tense instead of future tense. And I feel like that's a bit more of a respectful way to have a conversation about that. I know that that's a really weird side note, but- No, that's interesting. Is it actually? Yeah. I mean, you use that with your clients. So, it's interesting for us as listeners to kind of get some insight into that because it does, it makes sense if you were like,

gee, if you died tomorrow, that's extremely negative and quite shocking and scary. Yeah. Like I don't ever want that to be like wishful thing. I wonder if other advisors do that. If you are an advisor and you do that, please DM me and let me know because I don't, like it's not in our training or anything. It's just something that I've picked up on over time because I just feel more comfortable saying it that way. I don't know. But I just wanted to preface it because I noticed I said it then. Anyway. Good. Next one. Gee, if we don't have a will, which we've spoken about before, we did an estate planning episode recently, and we obviously know how important it is to have a will. And if you don't know or you haven't

listened to that episode, please do. It is a really important episode. We also did one a little while ago, G, with Lucy Percy, who's an estate planning lawyer, and she is brilliant. Like she actually works with my clients. Like she's not just a random estate planning lawyer that I know. She quite literally does most of my client's estate plans and she is a wizard. But if we pass away and we don't have a will, all of our assets, if we have a spouse, will be passed to our spouse. And then if there's no spouse, it will go to our children. And if you don't have a children, it'll go on from there to any living relatives left. But if you die without a will, which is called dying intestate, which I think is really interesting because you often hear these like

terms thrown around and you're like, what is intestate? It means you die and you don't have a will, but the state absorbs your assets and then they look for the next of kin. And if they don't, it all goes to the government, which is a very fun thing to think about because I don't think many people are like, well, what happens if you can't find someone to give my stuff to? However, inheritances do come in many different shapes and sizes. Just because you hear the word inheritance doesn't mean someone has gotten a million dollars in hot, hot cash. It could be a property. It could be interest on super. You might inherit someone's cash or cars or some sentimental possessions, or maybe, gee, some things that you don't want. There's heaps of

things that you can inherit. And I, gee, have been very lucky historically to inherit some really special things from my grandparents. I have like some salad tongs that my grandma used that are silver. And I have a whole heap of like trinkets and jewelry and stuff that are really, really special to me. So, it's really important to also understand that an inheritance might not just be cash. Because in my case, I didn't inherit cash or anything like that from grandparents, because obviously that would have been divided up among the siblings or their kids, their direct children, so my parents, et cetera. But I ended up with some really special possessions. So if someone passes away, there are lots and lots of things to be divided up and organized and

prioritized. It doesn't just mean that, okay, George, you're going to end up with some cash. It could be an asset. It could be something really small, but really sentimental. And to me, those things are some of my most important things. Like if my house was burning down, Jay, those are the things I would grab first after I'd grab my pets. Pets and the salad tongs. I love it. Pets and the salad tongs. Can you also inherit shares? You can inherit shares. And that's one thing that you need to be quite careful of,

because when it comes to shares and also property, you need to know the semantics of what selling that asset means. And I've come into a few people before who are like, oh my gosh, I inherited this share portfolio. V, need your help. Can we sit down and have a meeting? And I'm like, yeah, no problems. G, sit down. Let's have a chat. And they're like, I just want to sell it. Not interested in shares at all. I'm like, okay, no problems. Let's calculate what that means in terms of tax implications. And you need to understand this because a lot of the time, if you're inheriting shares, they could have been owned for 40, 50 plus years, which can you think of a compound interest on those shares over time, G? Very sexy. But when compound interest is

involved and those things are increasing in value, you're very likely to have to pay capital gains tax. And we want to avoid that if possible, because often you might find yourself in a position where you're like, all right, so G, I don't really want to own shares. Like this isn't what I want. It's not aligned to my values. But on the flip side, if I sell it, I'm up for a pretty hefty tax bill. And I don't particularly want that. We're not just looking at what you want when it comes to an inheritance. It's also looking at what is in your best interest financially as well. Because, gee, if you have to give away half of the wealth to tax, do you want to get rid of it? Do you really want to do that? Or do we want to make a plan that makes the most of it?

Mm-hmm. Okay. And are there age limits when it comes to inheritances as well in terms of cash and shares and property, et cetera? Yeah. Yeah, there are. So, if you're a kid and you're under the age of 18, you're very unlikely to be allowed to access any of the inherited wealth. Like, you're not going to be allowed to manage a property if you're 12. But when they turn 18, G, then all of that changes and you're treated as an adult, except, G, if someone has put in the will that they don't want you to access that until a certain age. So, they might say, all right, young adults, pretty crazy. I want them to inherit my property or I want them to inherit this cash, but I don't want them to be able to access it until they're 25 or till they're

30. And that's actually quite common, especially when people have larger amounts of wealth that they know are going to go to younger kids. Gee, there's also clauses that some people put into will. It's like, all right, it'll go to my son. I don't want him to access it until he's 25. But when he turns 25, if he doesn't have any addiction issues and he's all well and good, it can go to him. But if he is suffering from addiction issues, I don't want him to have access to a large amount of money. And the executor of the will is going to help organize all of this. But there are so many things and so much power that you have if you're writing a will. And I just don't think people understand. A lot of people just go, oh, inheritance,

no problems. But I've got a couple of clients who I manage portfolios for and they're not allowed to access their portfolios yet because they outlined that they can't have them until they're 30. Because the person who wrote the will wanted to make sure that they had established their own income streams and had a career or started a career before they actually came into some significant wealth, which from their perspective is absolutely their wishes and we are honoring those. Yeah. A hundred percent. And with an executor, you just outline them in the will. Is that correct? Yeah. Yeah. So you'll outline them in the will and they will know, and it could be someone that you know, or it could be someone like a financial advisor.

So G for example, I've got a couple of clients where they've got a boyfriend, but they're not that close with the boyfriend yet. Like it's a pretty fresh relationship and both of their parents aren't around anymore. And they just didn't have someone to be the executor. And I'm actually the executor of the will. So, you can nominate someone who is a professional executor, but in that circumstance, we'd also build into the will some fees and stuff like that. So, when I'm working on that, then I will get paid from the estate, which is, from my perspective, again, quite interesting. And I don't think that a lot of people consider that. They're like, oh, wow, I could just have my financial advisor do that.

Yeah. And I mean, financial advisors would presumably make very good decisions with the finances. So, smart thing to do there. Bea, we've touched on this in the past, but let's go over it again. If someone you love, say your mum, for example, they sadly passed away yesterday and they left all of their wealth, all of their millions to the lost dog's home. Happens. Yeah. So, can you dispute that if you think perhaps you deserve that money? it yes and no gee there are a couple of things around that and it depends on how I guess comprehensive their will and estate planning you know process was and if they've gone and seen a

and set all of that up it's very likely that you might not be able to argue it and I find it super interesting because I actually did have a situation it wasn't me personally it was another advisor that I used to work with they had someone whose mother actually left I think it was like 90% of her wealth to the lost dog's home and 10% to the kids. And the kids were like, what the hell? They didn't know that that was the case until the mother passed away because it was just in a will and that was her business. And you don't actually have to tell someone what is in your will unless you want to. Obviously, you're going to have to tell people if they're the executor of a will, but gee, if I leave you any money in my will, I don't have to tell you about that because

I might change my mind later. Who knows? Obviously, if it is completely leak proof, then you don't have a lot of wiggle room. But according to Victoria Legal Aid, if the person who made the will didn't have the capacity to make the will at the time they signed it, you could challenge it. Or if the will wasn't drafted and signed according to law, like there might be a little bit of a loophole if you're like, oh, like it was on the back of a napkin. Right. Probably, probably not. So, it needs to be the proper legal process. Or if one of the witnesses of the will are set to inherit something in the will so that is an interesting loophole because you might just be helping a maid out by signing it but also creating a loophole of someone

being able to challenge it yeah it can be challenged if you were making the will under the influence of others so for example we've had situations and thankfully not with any of my clients but you know i have a lot of financial advisor friends where you know maybe the kids are asking the parents to update the will while they're not well in hospital and they know what they're doing could be challenged then. Or if a person had a responsibility to provide for someone and they don't believe that they've left their fair share to that person. So, for example, if they had kids under the age of 18 and they've left absolutely nothing to that side of the family and the kids still have school fees and the cost of putting a roof over their head and stuff and

it's gone to maybe their like young mistress or something, like you could definitely challenge the will in that circumstance to say, did you know that they actually had kids that they needed to provide for? And that's probably not the most ethical of outcomes. However, if someone has gone to the trouble of making sure they have a watertight will, I also feel like sometimes it's not worth challenging. Not not worth, but we need to also understand that, you know, you might not be getting what you wanted, G. Like you might feel like you're entitled to something. But I also think that when we go through a process like this we need to check our entitlement a little bit and go what if their wishes are being completely fulfilled like a will is the wishes of someone

who has passed away and it speaks for that person when they're not able to speak for themselves anymore and I just feel like sometimes I've seen situations where people are challenging wills and I'm like they really wanted that and not to get I guess too personal but I have had situations where you know someone might have left all their money to the lost dog's home and not to any of their adult children. And they've made that decision because their adult children weren't looking after them. And they, you know, maybe had really disconnected relationships and hadn't talked to their kids in 10 plus years. And they're like, do you know what? I don't want them to have that money. They don't have anything to do with me. And I often feel a little bit, is the word icky?

Like when you hear that they're challenging a will and I'm like, well, you didn't even look after your mom for the last 20 years, but now you want her money? Oh, I don't know. I'm a bit opinionated on this, but at the same time, I think it's all about respect and making sure we're respecting the person that's passed away as well as you who is potentially inheriting something. Yeah, for sure. If anyone is interested in wills and all of that kind of thing, we did do an episode as you flagged earlier, V, so definitely go back and have a listen to that one. You also mentioned there the tax implications briefly, V. Yes, sir. What's the goal there? Like what types of inheritance do we need to pay tax on? How does that work? What does it look like? So, this is

where you probably should get some advice. Like, if you're inheriting a large sum of money and you need some advice, I definitely would get it because you don't want to get bitten with it later. But in Australia, G, you'll be very happy to know there aren't any inheritance or estate taxes, which is kind of cool. But as I said before, there might be some tax obligations that you need to meet depending on exactly what you inherit. So, for example, as we were talking about before, capital gains tax. Like, you might need to pay capital gains tax if you inherit a property and then sell it. But there are some exemptions to that. So, for example, I know that if you sell it within the first two years, there might not be tax payable on that. But if you sell

it after that two years, but it was an inherited asset, you do have to pay capital gains tax. I would be going on to the ATO website and checking that because they do have a really good detailed summary of what that looks like. But I also think that it is really important to understand that even if you're in the middle of a grieving process, like as I said before, George, it is not the worst thing to just park the money or park the asset to the side and out of sight, out of mind for a bit while you go through your grief period, which I think is really important because the last thing you need to do is be making decisions on money and making really big investment decisions when you're not in your right mind. And I feel like, George,

one of the biggest red flags for a financial advisor or anybody, right? Even if it's your uncle John who's, you know, in your ear and going, George, you need to see a financial advisor ASAP. You don't. You absolutely don't. Just get through that period and be okay, but do know the limitations of it. So, parking it for six to 12 months, non-issue. But if you have a property, we need to make sure that you're not missing out on something if you've got that two-year limit. So, for example, we don't want to pay capital gains tax. When it comes to inheritance, I've had a lot of people say things like, oh, V, I wish I'd known that earlier.

So, I think it's educate yourself and then park the money to the side because we don't want to be in a fickle position. But that is just me. And then when it comes to G, inherited shares, which you and I were talking about before, you're very likely to have to pay income tax on the dividends that are paid on those shares. And the same thing goes for property if it is an income generating property, like it is leased out and you have an income through having tenants in those properties, you're going

to have to pay income tax on that because that was the obligation of the person who has now passed away. However, the sale of those assets is treated differently. So, I would just be making sure that you're meeting your tax obligations and you know what applies to you. So, if you're in that situation, have a chat to a financial advisor and they will make sure that you are doing the right thing. But as I said before, no need to jump on it ASAP if you've just inherited something. Okay. Before we head to the break fee, how important is it that we see a financial advisor? I'm assuming like the larger the sum of money or the larger the inheritance, probably the more likely it is that we should see an advisor just to make sure we are making the correct decisions.

Is there like a monetary minimum that we should inherit before we see an advisor? Like if we're, if we just, in quotation marks, inherit like 10 grand or something compared to 100 grand, they're very different sums of money. Should we see an advisor if it is that larger sum? Gee, I'm very pro-advice, obviously. And I do believe deeply in making sure that you get the right advice. But as you know, when it comes to financial advice, there are fees associated with that. And that could sit from anywhere between $4,000 to like $8,000 if you're talking about an inheritance advisory piece. Like you're getting a statement of advice to make sure that that is okay. So when it comes to inheriting and you use the example of $10,000, going and seeing a

financial advisor might not be a viable outcome for you because it's like, well, you've inherited 10 grand. Are you going to go and use half of that to pay the advisor for some advice? Like I just don't feel like that is putting you in the best financial position, which is why I'm such a strong advocate of self-education and making sure that you know what your goals are and what that $10,000 could do for you and how you want to honor that and how you want to work with that but when it comes to something like a hundred thousand dollars g we have so much power and a lot of people will do something like they'll go all right well i got this inheritance i'm going to spend it all on a property and i mean you're not going to spend a hundred thousand dollars g unfortunately and get

a property and wham bam you don't have any kind of debt associated with that like that could be a house deposit for you, which is really great, but we need to think of the implications of that. And I'm very aware that a lot of people who get large sums of money are often like, oh my God, I could buy a house outright. But the thing there is, all right, gee, let's say you inherit half a million dollars. Do you know what I'm going to do? I'm going to go buy a property completely outright, like money win, right? But with that situation, you're putting yourself in a position where you're not generating cash flow, like you might own the property outright, but you're still having to go to work every day to make sure that you're putting food on the table and you don't

have the luxury of, I guess, financial freedom in that way. Like, yes, you might own your property completely outright and that's a very sexy option. But when it comes to inheriting money, I just don't think people see the power in that as much as I guess I do. And so, say you inherit 500 grand and instead of buying a property, G, you go and invest that in the share market and you're like, okay, well, I'm young. I've inherited this money. I'm going to invest it in the share market for the next 30 years and create financial freedom for myself over that time. You're going to put yourself in a position where that $500,000 will turn into about $4.7 million. So if you own your property outright today, is that going to generate $4.7 million for you in the future?

Look, in today's climate, maybe. Look, maybe. Maybe if you're buying in Sydney, but good luck buying a property in Sydney for half a million dollars. However, it's really important to understand the implications of the decisions you're making, George, because if you put that money in shares and invested that, that's now generating you an income and that income later down the track can buy you a property. so it's all about good financial planning and making sure that we're making the right decision for you because often people will just go all right well I'm just going to buy a property outright and I go oh my gosh like I can see how that makes a lot of sense and you'd feel very

gratified and property is aligned to your values but are you making the right decision for future you okay I think that is the perfect place to leave it for now V but on the other side of the break, we will be hearing your thoughts on what to do if you do receive an inheritance, and we'll also be running through the common mistakes that you see people make. So, don't go anywhere, guys. Back into it, V. Let's get straight into the juicy stuff. Oh, I love the juicy stuff. If we are receiving a huge lump sum of money, how can we make the most of it and just not blow it? well, first, I think it's about breathing and taking a step back from that money. As I said before, it is not the worst thing to put some time between you and your decision-making. I feel like

people feel a lot of pressure when it comes to inheritances and for good reason. Like it is a lot of money. It is life-changing. And I feel like, you know, I touched on guilt earlier. A lot of people carry a lot of guilt for not doing something like, oh my gosh, I've got this amount of money or I've got this thing and I need to make the most of it. And I'm not making the most of it. and you're staying up at night really late and you're not sleeping because of it. Like, be kind to yourself. It is hard. It is not easy. I think that if you've never been in that position, you are in no position to judge someone who is going through that. So, I think that giving yourself space to grieve and to process that and to even just step back and pretend the money

doesn't exist for a little bit and go, you know what? What do I want from life? How is this going to work? Step back for a little bit, G, and have a think about life. You know, you're in a relationship? You're really young. Do you want to get married? Do you want to have kids at some point? What are your views on property? Is that something you want to buy? What does retirement look like to you in the future? And how are you planning on achieving that? And then after you're clear on your goals and what you want to achieve, then go, all right, now I've got this asset that could help me achieve all of those things that I know I want to achieve. Your goals don't have to change because you've got an inheritance. I feel like so often people are like, oh my gosh,

I didn't want property, but then I inherited something. And I guess I have to buy it now because I just have this mass amount of money. Like that's not the case. That's not true at all. So I think it's about not making hasty decisions and then getting some advice, whether that is doing some research on your own. So then the next step, George, would be getting some advice and doing some research and making sure that you're making the most of it, whether it is, you know, five grand that you inherited and you just don't want it to go to waste. And maybe you're setting up a share portfolio for the very first time, or you are, you know, putting it into getting out of debt. I don't think that is a bad thing by any stretch of the imagination,

or if it's a larger sum of money or a house or a property or a whole heap of shares or whatever it is, I would get some advice and create a plan and make sure that you are taking future you into consideration. Obviously, a lot of people will be like, treat yourself, but I just don't want you to go overboard with that because it's really like an inheritance is really about future you and there's a lot of power in inheritances to create future wealth not just for you but for your future children or your future families and I just feel like it's so easy to have money slip through your fingers which leads me perfectly to my next question which is the common mistakes you do see people making when it comes to inheritances I feel like people spending it too quickly would

probably be at the top of the list. Yes, absolutely. People do funny things when they're going through grief, G. Yeah. I have seen a lot of people light a lot of money on fire because they are going through the throes of grief and they are not processing things properly and they feel like maybe spending money is going to help them feel better. Spoiler alert, money isn't going to make you happy. It is not going to bring the person that you have lost back. It is not going to make you feel any better. It might if you're spending it on going out for lunch with a friend or doing something for yourself, which is obviously very important, but people do have a tendency when they get large lump sums of money to burn through it. Obviously, as I said, small indulgences here and

there are not the worst thing to do. In fact, I encourage them, Georgia. But if you're finding yourself in a position where all of a sudden you can create financial freedom or pay off your debts or contribute to a deposit, make sure that that is the right thing to be allocating that money towards because sometimes what looks like the most logical answer is actually not the best financial answer. Okay. Any other common mistakes you see? Oh my gosh, G, there are heaps. The next one I feel like I've touched on throughout this entire episode and that's making decisions while you're grieving and then regretting them because you felt either pressured to do it because Uncle John at the wake told you that you had to X, Y, Z, and you just felt a lot of pressure to make a

decision. From my perspective, don't try to rush any type of decision, especially if you are particularly close to the person who has passed away. You have time. Take it. Use it. It is your time to use. Another one is letting money get in the way of things that are important, like your relationship with your family. So often with inheritances, we let it get in the way of our loved ones. We let it get in the way of, you know, relationships that we've always held really close to ourselves. And when the topic of inheritance has come up, it often gets really sticky. It gets really dramatic. People argue like money is the one thing that can completely divide a family. You know, you might have had a very close family and then a grandparent passes

away and all of that dissolves because they can't get on the same page. So, I think it's really important to remember who you are and what your values are. And as much as money is obviously something that can create wealth and freedom, I just think we need to not forget what is important and you need to know that you can be the bigger person and it doesn't need to be dramatic. It can be very non-emotional, but if you're going through that, I recommend getting some advice or talking to someone about that because it can be really, really hard. Gee, I have two more. The next one I have for you is not getting financial advice when you need it. So often people just go, oh, I don't need it. Like it's not worth it. At the end of the day, if you're inheriting a really

large sum of money, get some advice. If you don't take it, that's cool. But I promise you getting advice will make sure that you are making the right decision, whether you decide to invest in shares or just not do anything. And then the last one is something that I feel like I would do. like I feel like I would just be incredibly generous and I know that I guess that sounds like I've got lots of tickets on myself and I promise you I don't that is not the case at all I just really like looking after other people and I really like making sure other people are okay and some people seem to think that they're Oprah when inheritances come up like you get a thousand dollars and you get a thousand dollars and gee I'll pay off your credit card but I think it's

important to make a plan for your money before going around and handing it out because obviously there is a lot of power in a very large sum of money but that power is going to diminish if you start giving it away or trying to help absolutely everybody with it like obviously generosity is really important and I am all for it but I think that we need to put ourselves first in this situation and just because you can help somebody I know it sounds terrible doesn't mean you should be doing it george yeah it's tempting when you're an angel yeah okay v as we flagged before you do have a background in psychology do you think there is a tendency to view inherited money as bonus money almost and then therefore not treat it as cleverly as we could yeah talk me

through that what is that well it's not mine i didn't earn it i can do whatever i want with it I'm going to buy a boat with my inheritance. I deserve it. I've worked hard all my life. I totally get it. And you know what? If that's what you want to do, I am so not judgmental with the way people spend money. George, I have seen it all. I have been involved in interactions where people are talking about buying Maseratis for their mistresses and I could not care less. It is not my money, not my circus, not my monkeys. My job as a financial advisor is to help you make the best decision for you. And if buying a Maserati, George, for your mistress is the best financial decision for you, let me help you do that properly.

Obviously, Georgia, that one questioned my ethics a fair bit and wasn't aligned to who I am as a financial advisor, which is why I now have my own financial advisory practice and I do whatever I want and see the clients that nourish me. However, a lot of people will see an inheritance as bonus money, but what we really need to see it as is an opportunity. It is an opportunity to put future you ahead, is an opportunity to make sure that your life is completely sustainable and we are working towards financial freedom. Obviously, inheritance could mean anything, and it could mean $500, or it could mean $5 million. However, I think whatever it is, I just don't want you to treat it as bonus money. It needs to be respected. It's not money that you won. It's money that

somebody worked incredibly hard to earn, and now they're sharing it with you. And that to me is not a bonus. It is not something that you just throw down the drain. From my perspective, inheritances need to be respected. And that's, I guess, the premise I have. Like, every time I speak to a client, it is about making sure that we are respecting that money and we are respecting the person who earned it. Because you guys should know by now, money's hard to earn, hard to keep. And if we have it, we should respect it. Yeah, for sure. And I feel like that would help relieve some of that inheritance guilt that you spoke about before as well. V, money, as we touched on before, again, isn't the only thing

that people can inherit. What are your thoughts on what we should do with inherited property? Oh my gosh, there are so many, so, so many options. And there's no quote answer to this. Yeah. There's no like, oh, well, good, good question, G. People who inherit property should do X. Like there's no one size fits all approach to this. A lot of people who inherit property might actually be inheriting a really sentimental property, which is very hard to part with. It might be the family home that you grew up in. It might be a holiday house that you have incredibly fond memories of and you've spent a lot of time there and you want to hold on to it for your kids and

your future. And that's amazing. And as we've seen over the last 12 months in particular, Georgia, property is pretty good investment. Not bad to us, but we also need to make sure that we're making the right decision for us. Other people, they might not feel tied to it at all. They might want to sell it. They might want to get rid of it. They might want to hold on to it as an asset and lease it out or put it on Airbnb or do something else with it. I guess the part that gets really complicated is when multiple people are listed on an inherited property and then people have conflicting ideas on what to do with that property. So, for example, George, let's say we were siblings and we both inherit a property from our parents and we're both in

very different financial situations. You might be really financially comfortable. You and your partner, George, you're completely financially free. You've got really good incomes. You're not worried. That house is really sentimental to you and you just want to keep it because you want to go, you know, use it as a holiday house, you know, once or twice a year. It's not of any consequence to you. But on the flip side, I might be in a whole heap of debt. And to me, that property is a ticket to getting out of debt and setting myself up well. And so, we need to come to a conclusion that works for both of us because you'd be in that position where you're like, well, V, I want to keep it. You know, it means so much to me. What do you mean? And I go, well, that's the

ticket for me to get out of debt and create financial freedom. And obviously, from that perspective, it would be very hard to get on the same page. So, if you can't come to an agreement, we might end up in court, which obviously ends up in usually having the property sold. It's never, ever a cheap exercise. So, if you can avoid it escalating to that, that would obviously be the recommended option. And there's obviously lots of options. Like, I could sell my portion to you, George. Or we could negotiate that over time. Like, there are lots of ways to do that and I would be getting advice on it, but property can be quite dividing when one property gets inherited by multiple people. Yes, spicy. I did want to

ask you a little bit more about family dynamics when it comes to inheritances, but I'm wary of the time. This has been quite a long episode. So, I'm going to skip that question and finish with one that I think is extremely interesting. Is it? Do you think, VD, that there is a danger in leaving your kids too much money. So, celebs, for example, like Gordon Ramsay and Daniel Craig, they've been known to say in the past that they will not be leaving their incredible fortunes to their children. What's your take on that? Oh, this is such a spicy one because I'm so opinionated on this just because I'm like, that's not what I would do. But again, like it's their circus it's their monkeys they can do whatever they want and I totally understand

where someone like Gordon Ramsay is coming from because historically he said he wants his kids to work for their wealth and he wants them to go through the same I guess character creating process that he went through and I totally get that but I sit on both sides of the fence right like if you're not going to leave your fortune to your kids where's it going so I don't know where Daniel Craig or Gordon Ramsay are planning on putting their money, but it does have to go somewhere. Is it going somewhere that means a lot to you? If that's the case, fantastic. If you're giving it away just so your kids have to work harder, I'm a bit on the fence about that because with a good estate planner, with a really good will and estate plan behind you, that wealth can

become whatever you want it to become. And you have the opportunity of creating generational wealth like your inheritance or your family wealth is not just helping your kids it could be helping you know your kids kids and your kids kids kids kids like it can create a legacy and for me legacy is so important like if you have the ability to make life better for others especially others that you love why wouldn't you be doing that so one of the things that you could do is you know say, okay, well, we're not giving them a lump sum of money, but my entire inheritance will be invested. And the dividends from that investment will be divided among my kids as an income stream so that they're never financially pressed. It might end up being, you know, I'm sure this is

not the case for Gordon Ramsay because he has a lots of dollars J King, but I have situations where I've got clients and they have inheritances and their inheritances are all invested and they get an income stream of like 30 grand a year from that investment. So all of the kids in the family all have 30 grand a year coming in. That would obviously take off some very significant financial pressure. Like imagine going through life knowing that at a base level, you always had $30,000 a year coming in. It would mean that you are more likely to make good property decisions because you know you have that cash flow to fall back on even if you don't have a job. It means that you might be able to send your kids to a better school if that was in line with your values.

Like for me, it's not necessarily about spoiling them with wealth, but having a structure that means they are supported because I'm just of the opinion that if I had the ability to support my kids in the future, I would want to, but I totally understand, you know, Gordon Ramsay saying, I want my kids to work for wealth. I don't want them to be spoiled. I want them to work and I want them to have good work ethics, but I feel like with good advice, you can achieve both. Yeah. Interesting. I feel like that one, I feel like the listeners would probably be quite divided on that. I feel like it is totally unrelatable. Like how many times are you like, oh, well, we've got millions and millions and millions of dollars. What are we going to do with it?

Like, I totally get giving it to the lost dogs home, but what are you going to do with it? How are you creating your legacy? And something that is really important when it comes to inheritances for me is legacy like what are you leaving behind what does that mean what is your impact on the world because impact so much more than money like how you made people feel is going to be the thing that they remember about you not how rich you were and yeah it's time to wrap it up hopefully everyone got a little something out of today's episode now that we're at the end of it v i'm thinking that maybe it would be worth us dedicating an episode to kind of class issues almost in a way, because I'm also imagining people are listening to this and

thinking, yeah, well, I'm happy for Gordon Ramsay and Daniel Craig, but my kids aren't going to inherit millions. They would be lucky to inherit thousands. So, I think that's kind of an interesting piece of this discussion that we haven't really had time to touch on today. It absolutely is. There's so much privilege that plays into it. And I think class issues is something we need to discuss because there's also so many barriers to advice as well. Like, you know, someone like Gordon Ramsay is going to set his kids up for generational wealth and they won't have to worry ever again. And there's just so much privilege that plays into that. But someone who, you know, has never created wealth and they're not going to get an inheritance

from their parents and they're working their asses off, but their kids are still not going to inherit anything. Like I totally get that. And it comes down to me, to legacy. Like what you leave behind doesn't have to be financial, but you're right. We do really need to break down the class issues because obviously there's a lot of privilege in being able to access advice as well, which is why I do what I do, George, which is why we give away so much free advice and so many free resources on She's On The Money because I just want people to have access to the advice that i know wealthy people can afford yeah for sure all right let's wrap it anyway g that is all we have time for today so before we head off we'd like to acknowledge and pay respect to australia's

aboriginal and torres strait islander peoples they're the traditional custodians of the lands the waterways and the skies all across australia we thank you for sharing and for caring for the land on which we are able to learn we pay our respects to elders past and present and we share our friendship and our kindness. And remember guys, the advice shared on She's on the Money is general in nature and does not consider your individual circumstances. She's on the Money exists purely for educational purposes and should not be relied upon to make an investment or a financial decision. And we promise Victoria Devine is an authorized representative of InFocus Securities Australia, Proprietary Limited, ABN 47097797049, AFSL 236523.

Hey, you, you're getting better at those numbers, J. King. Thank you, rolling off the tongue. See you next week, guys. Bye, guys.