Banking on Inheritance

Banking on inheritance

Should you bank on an inheritance coming your way and take a relaxed view of future financial planning? Are your parents going to leave you money? Or is Great Aunt Mabel a likely candidate?

Before throwing caution to the wind and relying on a possible future windfall, it would be wise to make a realistic assessment of your position. Ask yourself these questions:

  • Do my parents (grandparents or great aunts) have many assets in the form of savings, property or shares? Do they have any debt?
  • How old are they, and how long are they likely to live (a quick review of family history and their individual health will help with this). Are their savings being eaten up by Resthome care?
  • Are there any other siblings, nieces, nephews or grandchildren that they might leave money to?
  • Are they likely to split the money evenly between their children, or will they perhaps favour one or more family members? (due to situations of hardship or favouritism).
  • Have there been any new relationships, marriages, adoptions, or step children in the family that might complicate matters?
  • Have your parents made a will, and are you clear on its contents? Have you seen a copy?

Banking on Inheritance


It is generally risky to rely on a future inheritance, as many things can change or go wrong.

If your parents die intestate (i.e. without a Will) then all of their assets will be passed to an Administrator, such as the Public Trust, to distribute. They will then follow a lengthy legal process to determine who gets what.

Even if your parents do have a will, it is still possible that a member of the family may dispute its contents, and have the Will overturned.

Sometimes wills contain some nasty surprises that families simply weren’t expecting. For example, it is not unheard of for a dying person to leave all of their assets to a well loved charity, such as the SPCA or their local Hospice. Provided the person was of sound mind when they wrote the will, you will have little chance in contesting their decision.

It’s also possible that the wealth previously held by your family may have dissipated over time – due to market downturns or poor investment decisions.

Perhaps your parents took out a reverse mortgage on their house to fund all that international travel they enjoyed in their retirement. A finance company will now be a secured creditor, and first inline for the proceeds of their house sale!

Or, perhaps one or both of your parents ends up in Residential Care for a period of time prior to their death. The New Zealand Aged Care Association says the average stay in Residential Care is around 80 weeks, and the average cost is around $80,000. That could be quite a dent in your parents’ final nest egg!

The safest course of action is to make financial decisions throughout your life as if you will not be receiving any inheritances in the future. That way, your financial position will be secure, and any inheritance that does come your way will be a wonderful bonus.

For more expert advice on protecting your assets, check out our Family Finances section.

Join more than 20,000 families

As we build a strong community of like minds:

  • Get the best tips from the best experts
  • Recipes, parties, crafts and activities
  • Special offers, competitions and more...

Sit back and relax and let us deliver to your inbox.

Please note that Kiwi Families is not intended to replace individualised, specialist advice that you receive from other financial professionals. Please seek specialist advice for your situation.

You might also be interested in:

Five tips for improving your family’s financial health

A large part of my role as an Authorised Financial Adviser is actually meeting people in the community. As we…

Teaching your kids about money

The New Year is well and truely upon us and the kids have trundled off to the school-yard. Curricular-a-plenty will be firing…

Get creative and create a retirement plan

Retirement is going to be your single largest milestone in your life, one that without proper planning could well become a millstone.

Planning a family holiday

“When you look at your life, the greatest happinesses are family happinesses” – Joyce Brothers. So you’re thinking of going…

Welcome to Kiwi Families

We bring thousands of families together to learn from each other.

Join a community raising great kids: