First published September 28
I could tell Alicia was really pissed off with her mother-in-law because she called her a witch, a money-grubbing bitch, and far, far worse before she even stopped for breath.
I let her go for a while. My life’s pretty vanilla these days, and this was getting spicy. Like a cross between Fifty Shades of Grey and an estate planning textbook.
The Office Fling and the Strumpet
I might add this is a true story, not something lifted from Desperate Housewives of Wangaratta.
Here’s Alicia’s rant, edited for a mixed audience.
Years ago, Alicia’s dad had an office fling with somebody 14 years younger. It got hot and steamy. They didn’t exactly get caught naked on the boardroom table, but they did get caught out.
These days, I suppose it would be called an inappropriate relationship.
Within a few months, the sugar daddy had left the marital home, the strumpet (Alicia’s words) was pregnant, and as you guessed, not everybody lived happily ever after.
Then a few weeks ago, he let slip to one of his three daughters from marriage #1 that they’d had all the financial support they were going to get from him. The gravy train had come to a halt.
Give Me the Money
The rest of his estate (quite a large one, as it happens) was to be left to the strumpet.
That’s why Alicia was pissed off. She had a right to a decent cut of dad’s money, or so she reckoned.
When she stopped to draw breath, I told her under the law (well, in the 19th Century at least), I’d soon inherit six generations of accumulated Naked family property, just by being the eldest son. She didn’t seem interested.
But the laws, alongside community expectations, have changed and Alicia might not get a cent.
She won’t be the only one to be mightily pissed off.
One Day, All the Baby Boomers Will be Dead
Over the next 40 years or so, the richest generation in history will all die, and give up trillions of dollars in assets. Yep, trillions.
And if you thought the Age of Entitlement was over, then you’re wrong. It’s not even warming up on the sidelines yet. (Get it? Footy analogy in Grand Final Week?)
Anyway, those trillions will be mostly largely tax-free, thanks to John Howard’s superannuation handouts, and the CGT exemption on the family home.
Millions of people, just like Alicia, can’t wait to get their grubby mitts on all that money.
Alicia’s dad’s an adult with all his faculties intact. He’d paid for Alicia’s education, bought her a car, and given her a house deposit.
Now, he’s got another family, with three more kids to look after.
So I told Alicia she should respect her dad’s right to leave his money to whomever he chose.
The Fight of the Century
In the black corner, we’ve got the Baby Boomers, who Y-Gen reckons are the most selfish generation in history.
In the red corner, there’s Y-Gen, often accused by Baby Boomers of being the most selfish generation in history.
Most Baby Boomers hope to enjoy a long and extravagant retirement, paying no tax and if possible picking up the Age Pension along the way (Noel Whittaker would be proud).
Y-Genners know there’s not going to be an Age Pension forever, so they hope their Baby Boomer parents enjoy about a decade of thrifty retirement, then drop dead.
Sound harsh? Nope. It’s playing out already.
In fact make a note of this, because intergenerational wealth transfer will be the biggest financial battleground (and the biggest money spinner for lawyers) over the next couple of decades.
Better Get a Lawyer, Son
Back to Alicia’s philandering father. Should he be sharing his legally acquired loot with all his spouses and offspring?
I don’t have an opinion on that. It’s none of my business.
What I do know is this; families have been torn apart over the distribution of a super payout of a few thousand dollars.
So at the risk of putting money into the pockets of lawyers, here are my three best estate planning tips:
1. Lawyer up. Find a solicitor who specialises in estate planning. Get it all sorted – wills, powers of attorney, testamentary trusts. Review it every five years, or the next day if you divorce, separate or your kids disappoint you. Trust me here – lawyers will make ten times as much when you die if you skip this step.
2. Tell your family what your wishes are. If you’ve feeling brave, do this when they’re all in the same room. Some people might get hurt, but if they love you, they’ll get over it eventually.
3. There are some great financial planners out there. But never, ever let one of them ‘sort out’ your estate planning. It’s not what they’re paid to do. Likewise, best not fill in forms called ‘binding nomination’ with your super fund, unless your solicitor advises it.
The Naked Takeaway
I saw Alicia’s mother-in-law a few days after the phone call, driving a new Audi. Perhaps that’s why Alicia was cranky – her dad only gave her a VW.
A final comment – without going all Zen on you, here are two tips for a happy life:
Accept what life hands you with grace and humility. And be kind to others.
Happy Grand Final Week!
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The Naked Investor provides education, not advice. Do your own research, you know the drill.
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