As many as 56% of Australians do not currently have a will in place, while 53% of parents have not discussed their will and legacy with their children.
That's according to financial advice provider Perpetual, who found the nation is "ill prepared to face the largest inter-generational wealth transfer in history".
Perpetual surveyed 3,000 Aussies to find out their attitudes towards wealth, inheritance and their families as part of the 2019 edition of the 'What do you care about' survey.
The survey found Australian parents hoped their children would use their inheritance wisely (60%) and invest in their future (58%).
Rising cost of living, slow wage growth and a volatile property market paint a vastly different picture of wealth for Australians today than it did 30 years ago and makes the smooth transfer of wealth even more important for the next generation.
It's estimated 70% of families will lose their wealth by the second generation and 90% will lose it by the third.
General Manager of Private Clients at Perpetual Andrew Baker said it's vital the stigmas around discussing wills and inheritance are broken down to offset these risks.
“Conversations about money can be awkward, and for many, discussing where and how your wealth will be distributed when you’re gone is no exception,” Mr Baker said.
“As humans, we tend to shy away from discussing money amongst our families and friends.
"However, as we approach the largest inter-generational wealth transfer in history with more than half of Australians expecting to inherit, why have only just over a third discussed their wishes with their children?”
'Free Range Families' are the most open
The survey uncovered a unique cohort coined the 'Free Range Families': a group which values their families and interpersonal relationships over their financial situation.
However, this group was found to be more comfortable talking about money, with 79% of 'Free Range Families' stating they are comfortable discussing money with their families compared to 57% of regular Australians.
'Free Range Families' are also more comfortable discussing their future (82%) compared to regular Australians (57%).
According to the survey results, 59% of 'Free Range Families' were in their fifties or above and 64% were women, while 36% were men.
The research revealed attitude to money are passed down through the generations, with 62% of Australians and 69% of 'Free Range Families' stating their parents had some degree of influence towards their attitudes to money.
When asked if they wished their parents had given them more help understanding financial matters, 32% of Australians said yes compared to 24% of 'Free Range Families'.
Mr Baked urged families to normalise discussions around money and the future sooner rather than later in order to preserve wealth across generations.
“Baby boomers were fortunate enough to experience a period of supercharged wealth accumulation which has resulted in a stark contrast in levels of wealth between their generation compared to millennial's and also a contrast in attitudes towards money," Mr Baker said.
“When it comes to wealth, what’s important to you may not necessarily be important to your children but discussing your wishes openly will minimise any possible surprises or misunderstandings when it comes time to distribute inheritance.
“As your life changes, it is important to continually review and adjust your will in the instance you go through a major life event.
- How to sell an investment property
- How The Block’s Bianca Chatfield is saving for a house during COVID-19
- How can I get a classic car loan?
- Bank of Us, Bank First slice home loan rates
- HSBC and RAMS slash saving account rates