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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 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 bout 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. First, get a clear picture of where you’re at financially, right now – e.g. what you own, what you owe, and what’s already working well. Then start thinking about where you want to be. What does your ideal financial future look like?
That’s when you make a plan. Even better, sit down with a financial planner and build that plan together. They’ll help you weigh up your options. Whether it’s paying off debt, investing, or using the inheritance to support others. The key thing is to be intentional.
The key thing is to be intentional, don’t let that money drift away.
If you are feeling emotional, it might be tempting to grab the latest phone, upgrade the car, or book a luxury escape. And hey, there’s nothing wrong with enjoying a bit of it. But before you spend, ask yourself: does this fit into your long-term strategy? A bit of planning now means you’re not just spending; you’re setting yourself up for something bigger.
Dean: One of the biggest mistakes people make with inherited money is rushing into decisions without getting advice. It’s easy to feel like you need to act quickly, whether that’s investing, spending, or even giving it away but that urgency can lead to regret down the track.
There’s often a sense of responsibility that comes with an inheritance. People want to “do the right thing,” but without a clear plan, it’s hard to know what that actually looks like. Some jump into buying property, others give large gifts to family, or make emotional purchases that don’t really serve their long-term goals.
There’s often a sense of responsibility that comes with an inheritance.
The best way to avoid those missteps is to pause, get clarity on your current financial position, and if you can, talk to a financial planner. They’ll help you weigh up your options and make sure your decisions align with your values and future plans.
It’s about being intentional. Ask yourself: could this money help me build a buffer, invest in something meaningful, or give me more freedom down the line? A bit of planning now can save a lot of second-guessing later.
Dean: That’s a tough one to answer without knowing more about the person or family’s situation. Everyone’s starting point is different, and that makes a big difference in what’s “smart”. But if someone inherits $50,000, the first thing I’d say is Don’t Rush. Take a breath, park it in an interest-bearing savings account, and give yourself a few months to think it through.
If there’s high-interest debt like credit cards and personal loan that’s often a good place to start. Clearing that can free up cash flow and reduce stress. For others, it might be about building a buffer like an emergency fund that gives you breathing room if life throws a curveball.
Some people might be tempted to invest straight away, but again, it depends. Are you investing for growth, income, or security? Do you understand the risks? That’s where advice comes in. A financial adviser/planner can help you match your options to your goals.
If there’s high-interest debt like credit cards and personal loan that’s often a good place to start.
And yeah, it’s tempting to spend a chunk on something shiny. A new car, a reno, a holiday. Nothing wrong with enjoying a bit of it. But before you do, ask yourself: does this fit into your long-term plan? Could this money help you get ahead, reduce stress, or give you more freedom down the line? Maybe there is a way you can do a bit of both and that is the kind of thinking that turns a windfall into a real opportunity.
Dean: In some cases, yes, using an inheritance to pay off a mortgage or buy a home can be a smart move. It depends on your situation, but putting the money into something long-term like property can create stability and build equity. It’s also a way of honouring where the money came from by turning it into something meaningful that lasts.
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.
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. But like anything, it’s worth stepping back and making sure it fits with your overall financial plan. Don’t just jump in for sentimental reasons, get advice, weigh up your options, and make sure it’s the right move for you and your family.
Dean: Park the money in an on-call or interest-bearing account, then leave it alone for a while. That gives you time to think without pressure. Don’t rush into investing. Do your research, don’t speculate. A well-diversified managed fund is often a good starting point, especially if you’re new to investing. And ideally, as always, get advice!
Don’t just jump in for sentimental reasons, get advice, weigh up your options, and make sure it’s the right move for you and your family.
There are plenty of online platforms in New Zealand, but an inheritance often comes with a sense of responsibility. Trying to pick stocks or build a portfolio yourself can be confusing and risky. In my experience, 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.
So take your time. There’s no rush. Find an adviser you feel comfortable with—someone who understands the emotion and responsibility that comes with inherited money or assets. We’ve seen this before, and we’re here to help you make decisions that feel right for you.
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: Again, this is a personal thing and every scenario is different. My advice is to take some time to think it through. If you’ve got a partner, talk it over together, ideally with an adviser who can help guide the conversation. Inheritances can stir up powerful emotions, and those can be hard to articulate, especially with loved ones.
Sometimes one person sees the money as a chance to invest or pay down debt, while the other might be thinking about a new car or a family holiday. Neither is wrong, but it’s important to get on the same page together with what you want. A good adviser won’t just talk numbers. They’ll help you both feel heard and make sure the decisions reflect your shared goals.
Inheritances can stir up powerful emotions, and those can be hard to articulate, especially with loved ones.
The key is to slow down, talk it out, and make sure whatever you choose fits into your long-term financial picture.
Dean: Estate duties were abolished in New Zealand back in 1993, and gift duties followed in 2011, so most inheritances aren’t taxed when received. But if the assets you inherit (like property or shares) start generating income, that income is taxable. So, for example, rent from an inherited property or dividends from shares would need to be declared.
If the inheritance comes from overseas, it’s usually not taxed in New Zealand either. But things can get tricky if it’s coming through a foreign trust or if the assets generate income. The tax treatment depends on how the trust is structured, and that’s where specific advice is really important.
Don’t assume it’s all tax-free.
In short, don’t assume it’s all tax-free. Take the time to understand what you’ve inherited and how it’s set up. Talk to an adviser who knows the ins and outs. Inheritances often come with a sense of responsibility and getting the legal and tax side right is part of honouring that.
Dean: This is probably the hardest question to answer, because every situation is different. Often, the pressure doesn’t come from outside, it comes from the person who’s received the inheritance. There’s a deep sense of responsibility, and a desire to honour the legacy of their parents or loved ones.
Ideally, these conversations happen before the inheritance is triggered. Talking about values, intentions, and hopes ahead of time can make things clearer later. But to be fair that’s not always possible. So if you’re in that position, take your time. You don’t have to decide overnight.
And if you’re the partner of someone who’s received an inheritance, the best thing you can do is give them space. Don’t put expectations on them as they’re already working through a lot. Support them, listen, and if needed, suggest speaking with an adviser who can help guide the process gently.
If you’re the partner of someone who’s received an inheritance, the best thing you can do is give them space.
Honouring a legacy doesn’t mean following someone else’s path exactly. It means making thoughtful decisions that reflect your own life and values, while still respecting where the money came from.
Dean: It’s completely normal to feel overwhelmed. Inheritances often come with emotion and a sense of responsibility, and that can make decision-making feel heavy. My advice? Don’t rush. Put the money in a separate bank account, ideally one that’s not linked to your mortgage or everyday spending. Let it sit there for a while, untouched.
It’s completely normal to feel overwhelmed.
That breathing space gives you time to think clearly. Then, when you’re ready, talk to a financial adviser/planner - someone who’s experienced in this space and can help you navigate the options. We’ve helped many people through this process and understand how personal and emotional it can be. The goal isn’t just to make smart financial decisions, it’s to make choices that feel right for you.
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.