In New Zealand, those born before 1966 currently hold 60 percent of New Zealand’s $2.29 trillion total individual net wealth. The estimated value that will be transferred by those aged over 55 in the next 20 years will be approximately $1.11 trillion.
Sharing Wealth in Kiwi Families: What You Need to Know
The upcoming transfer of over $1.1 trillion in wealth from older New Zealanders is going to affect many families. If you're thinking about helping your kids financially, here's what you should know in plain English.
The Good News
Since 2011, you can give away money or assets without worrying about gift tax. This has made it much simpler for Kiwi families to share their wealth across generations.
Important Things to Consider
- Get it in Writing: Even though it's family, documentation matters. Having clear records of gifts or loans can prevent misunderstandings down the track.
- Rest Home Care: Planning to move into aged care? Be careful with large gifts. If you've given away significant money within five years of needing rest home care, the government might still count this as your money when calculating care costs.
- Family Loans: Be crystal clear about whether you're giving or lending money. This is especially important if your kids are in relationships, as it could affect who has rights to the money if circumstances change.
Quick Tip
While these conversations might feel uncomfortable, a quick chat with a lawyer can save your family from future stress. They can help make sure everything's properly sorted and everyone's interests are protected.
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