Family's Role in Inheritances and Charitable Giving Trends

Affairs of the Heart: Where does family fit into the bigger picture John McLeod JBWere Family Advisory and Philanthropic Services

Its a simple formula It s a simple formula Number of people passing away What were their net assets How much was left for charitable causes Amount left to charity

Annual deaths are rising Annual deaths are rising Annual and projected deaths in Australia 1910-2060 The number of annual deaths has doubled over the last 60 years 350,000 300,000 It will double again in another 50 years 250,000 200,000 Numbers then plateau by 2090 150,000 100,000 Others such as the UK and New Zealand are further along this trajectory 50,000 0 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 Female deaths Male deaths Total deaths

The value of inheritances The value of inheritances is rising even faster is rising even faster The rising value of inheritances is compounded by increasing death numbers and growing asset values Total Australian annual inheritances 2002-2062 (2024 $ Billion) $1,100 $1,000 $900 Over $150 Billion will transfer this year alone, just below the total charity sectors income $800 $700 $600 $500 This rises to over $1 Trillion annually by 2062 and a total of $5.4 Trillion is expected to transfer over the next 20 years $400 $150 Billion in 2024 $300 $5.4 Trillion over 20 years $200 $100 $0 2002 2012 2022 2032 2042 2052 2062

The one part of the formula The one part of the formula that isn t working well enough that isn t working well enough Who inheritances come from Charities receive just 1% of these inheritances, well below the 4-5% seen in the US and UK Single with children Couple with children Single without children Couple without children Who inheritances go to Charity Next generation Remaining partner Other family, friends

But it is happening at the But it is happening at the very top levels of giving very top levels of giving Of the 50 largest donors in Australia, 22 are now deceased Largest 50 private donations in Australia 2024 $243,000,000 This is a combination of Foundations established during their lifetime and large one off bequests $81,000,000 Donor/Founder deceased $27,000,000 It mirrors a larger % of big estates giving to charity in the US and UK $9,000,000 $3,000,000

Transferring more than assets Transferring more than assets What do we value as individuals and as a family? What do we value as individuals and as a family? What unifies the family? What unifies the family? What does our shared vision look like? What does our shared vision look like? How do we integrate and empower our rising How do we integrate and empower our rising generation? generation? Where will conflict lie, and how to build structure Where will conflict lie, and how to build structure around it? around it?

What do people want to pass on? What do people want to pass on? We all know the Warren Buffett line We are seeing more clients raising these issues and acting on them Most desire not having family values stop with them and the way wealth transfer is handled can guide the pursuit of purpose for the next generation Putting in place broader society support through inheritance can be the common thread that stitches future generations together Not having a plan almost ensures conflict and having one but not communicating it risks conflict PLAN & COMMUNICATE

Even for those just wanting to Even for those just wanting to maintain generational wealth maintain generational wealth Studies (Uni. Of Adelaide) show families involved in community support, maintained wealth better through generations Practical learning in business, financials and investments for kids Develop longer term thinking and alignment of values Younger generations demonstrate leadership skills and develop relationships beyond the normal circle A psychological boost and a builder of emotional intelligence

Thoughts for GiW professionals Thoughts for GiW professionals Many are already thinking about legacy, they just haven t linked that to GiW s How to raise topic, they probably haven t considered it (not said no) The female voice. Life expectancy is 4 years higher for females widening that gap over time. The oldest daughter is 50% more likely to control family inheritances than the oldest son Focus on the wealthy

more thoughts more thoughts Involve family early and often. They ll still hold 90%+ of the wealth and if the US trend of adding to existing Foundations grows here, they will be guiding them Don t ignore your asset rich but income poor volunteers Use their peers who are confirmed bequestors Do your research about the family dynamics, they are all different

Why this is important Why this is important If nothing changes we ll go from $1.5B to $4B in GiW s over 20 years If we can normalize this action, the return is the single largest increase in charitable giving available to the sector Groundwork and preparation is needed for an increased focus on inheritance tax Focus on the opportunity you are providing to the potential donor. It s a positive about legacy, not a negative about mortality