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With Baby Boomers passing on unprecedented amounts of wealth, many Gen Xers and Millennials are finding themselves on the receiving end of inheritances, sometimes expected, sometimes not. But what should you do with that money? Spend it? Save it? Invest it?
We sat down with Dean, one of our financial advisers, to unpack the emotional and practical side of receiving an inheritance and talked about how to make decisions that align with your goals, values, and future.
Dean: Right now, we’re starting to see a big shift of wealth between one generation and the next. Boomers are heading into retirement, and that means there’s a lot of wealth about to change hands. Most of their wealth is tied up in things like real estate, super, savings, and investments. Typically, the money moves first between spouses, and then, over time, passes down to kids and grandkids.
Over the coming decades, billions of dollars is set to move from Boomers to the next generations. That’s a game-changer for a lot of families, opening up opportunities and giving younger folks a real leg up.
Wealth is being transferred in a variety of ways. Sometimes it’s through the formal channels like wills, trusts, and estate plans. Other times, it’s more informal, like parents helping with a house deposit, paying for Uni, or gradually handing over the family business or investments.
Something I am seeing more and more is Boomers giving while they’re still around to see the impact. There’s real joy in helping a child buy their first home or supporting a grandchild’s education, and many want to witness the difference their support makes. As I have written about in my past blogs, it is about legacy, connection, and seeing the next generation thrive, right here, right now.
Dean: First, put it in an on call or interest-bearing account. Then, do nothing, at least not straight away. Take a breath and give yourself space to think. Inheritances can be very emotional, and it’s easy to rush into decisions. Get a clear picture of your financial position, what you own, what you owe, and what’s working well. Then start thinking about your ideal financial future.
That’s when you make a plan. Even better, sit down with a financial planner to build that plan together. They’ll help you weigh up your options, whether it’s paying off debt, investing, or supporting others. The key is to be intentional and ensure your decisions align with your long-term strategy.
The key thing is to be intentional, don’t let that money drift away.
Dean: Rushing into decisions without advice is a big one. That urgency can lead to regret. People want to “do the right thing,” but without a clear plan, it’s hard to know what that looks like. Some jump into buying property, others give large gifts, or make emotional purchases that don’t serve their goals.
To avoid missteps, pause and get clarity on your financial position. Talk to a financial planner who can help you make decisions that reflect your values and future plans.
There’s often a sense of responsibility that comes with an inheritance.
Dean: Everyone’s situation is different, so there’s no one-size-fits-all answer. But again, don’t rush. Park it in a savings account and take time to think. If there’s high-interest debt, that’s often a smart first target. It can free up cash flow and reduce stress.
Others might build an emergency fund or consider investing. But before investing, understand your goals and the risks. A financial adviser can help match your options to your goals. And yes, enjoy a bit of it if you want, but make sure it fits into your long-term plan.
If there’s high-interest debt like credit cards and personal loan that’s often a good place to start.
Dean: That can be a smart move if it fits your overall financial plan. Property can create stability and build equity. It’s also a meaningful way to honour where the money came from. But don’t jump in for sentimental reasons, get advice and weigh your options.
Buying a home or reducing debt can be a nod to the significance of the inheritance as well, especially if it came from someone who worked hard to build that wealth.
Dean: Again, park the money and take time to think. Don’t speculate. A well-diversified managed fund is often a good starting point. And ideally, get advice. Inheritances often come with a sense of responsibility, and trying to build a portfolio yourself can be risky. Find an adviser who understands the emotional side of inherited money.
People who inherit money often feel overwhelmed. There is a sense of wanting to honour the person who left money to them and avoid making the wrong move.
Dean: This is personal. Talk it through with your partner and adviser. Inheritances can stir up emotions, and it’s important to get on the same page. A good adviser helps you both feel heard and ensures decisions reflect shared goals. Slow down, talk it out, and make sure your choices fit your long-term financial picture.
Inheritances can stir up powerful emotions, and those can be hard to articulate, especially with loved ones.
Dean: Most inheritances aren’t taxed in NZ, but income from inherited assets is. If the inheritance is from overseas, it’s usually not taxed either, unless it comes through a foreign trust or generates income. Don’t assume it’s all tax-free. Get professional advice from your accountant to understand what you’ve inherited and how it’s structured. We can help refer you to a good accountant if you need one.
Dean: This is deeply personal. Often, the pressure comes from within. Ideally, these conversations happen before the inheritance is triggered. But if not, take your time. If you’re the partner of someone who’s inherited, give them space and support. Honouring a legacy means making thoughtful decisions that reflect your life and values.
Dean: It’s normal to feel overwhelmed. Don’t rush. Put the money in a separate account and let it sit. Then, when you’re ready, talk to a financial adviser who understands the emotional and financial sides of inheritance. The goal is to make choices that feel right for you.
It’s completely normal to feel overwhelmed.
1. Pause First
Don’t rush into decisions. Let the money sit in a separate interest-bearing account while you consider your options.
2. Get Advice
Talk to a financial adviser or planner, someone experienced with inheritances who can help you make a plan that suits your life and values.
3. Understand Your Financial Position
Take stock of what you own, what you owe, and what your goals are before making any moves.
4. Avoid Common Mistakes
Don’t speculate or make emotional purchases. Avoid trying to pick stocks or build a portfolio without guidance.
5. Be Intentional
Think long-term. Ask yourself if spending aligns with your financial goals. Don’t let the money drift away without purpose.
6. Consider Paying Down Debt
High-interest debt is often a smart first target. It can free up cash flow and reduce stress.
7. Property Can Be a Legacy
Using inheritance to buy a home or pay off a mortgage can be meaningful and financially sound, if it fits your plan.
8. Talk It Through
If you have a partner, discuss your options together. An adviser can help facilitate those conversations.
9. Respect the Emotion
Inheritances often carry emotional weight. Honour the legacy but make decisions that reflect your own needs and values.
10. Know the Tax Basics
Most inheritances aren’t taxed in NZ, but income from inherited assets is. Foreign inheritances may have extra rules, so get advice.
Whether your inheritance is modest or substantial, the decisions you make with it can shape your financial future in powerful ways. Dean’s advice? Don’t rush. Take a breath, get advice, and make choices that reflect both your needs and your values.
Thinking about what you’d do with an inheritance, or already received one? Chat with your adviser to explore your options and make a plan that works for you. We’re here to help you turn a one-time windfall into long-term momentum.
Book here for a financial planning and investment consultation with our team today
Dean.
Hi everyone! My name is Dean, and I am Financial Adviser and coach. I work with people to help them to achieve their financial goals and assist them to make smarter financial decisions. Drop me a line for a chat and to work through your goals. I work with you to become financially fit and together we create a game plan for your financial future. D.
Disclaimer: Dean Blair (FSP87402) is a Financial Adviser with Velocity Financial (FSP95466). No financial decision should be taken based on the information in this blog alone. Please see our disclosure statement on our website.
Always get professional advice
The information shared in this post is meant to be general guide to support you on your journey. When making important decisions about your finances, we encourage you to seek independent financial advice first, tailored to your unique situation. As well as talking with a financial adviser, make sure you talk to your lawyer and accountant too – together they'll help you find the best solution for your specific situation. Our knowledgeable financial advisers are here to help. Check out our website for the details about our financial advisory services in our disclosures:
https://www.velocityfinancial.co.nz/disclosure-statement.