The dust has barely settled on our Christmas decorations but we’re back and open for business. We like to start our year by consulting our legal ‘Crystal Ball’ and predicting what might be in store for 2024.
Interested in what we think is on the cards? Read on!
The great intergenerational wealth transfer has entered the chat
Brace yourselves! The largest intergeneration wealth transfer in Australia’s history is knocking at our doors. Are you ready?
In 2021, the Australian Government’s Productivity Commission released a research paper that shed light on the economic effects of wealth transfers. A key takeaway from the paper is that the total value of inheritances passed onto the next generation is projected to increase nearly fourfold, with an estimated $3.5 trillion (or an average of $175 billion per year).¹
These eyewatering figures are just one aspect of the report that we think is compelling. The report also notes that inheritances consistently account for most of the wealth transfers. In 2018 approximately $107 billion (90 per cent) of total wealth transfers were inheritances, compared with less than $14 billion for gifts.² (Sounds like people don’t like ‘voluntarily’ parting with their cash…) Ageing Australians today are wealthier than ever, and the data proves it.
To us, this report sends a clear message – whether you like it or not, an unfathomable amount of wealth will (and has already started to) change hands. You will probably give (or receive) a chunk of it. The best way to prepare yourself is to have a comprehensive estate plan in place.
As always, there are two sides to the same coin. If you are thinking about passing on your wealth, you may be thinking:
- What do I own, and how do I own it?
- Who do I want to benefit from my wealth? Are there important causes I want to support?
- How will I give away my wealth? Will my wealth be protected for the next generation?
- What about my super? How does that tie in?
If you are somebody who expects to receive an inheritance, you may be thinking:
- What amount will I receive, and how will I receive it? Will what I receive meet my expectations?
- How will this inheritance impact my life? Do I need to take steps to protect the assets I will inherit?
- Should I be thinking about my own estate planning? (hint: yes!)
Luckily for you, we have the experience and knowledge to assist you to answer these questions, no matter where you stand. We think everyone needs to think about estate planning, whether you are young, older, consider yourself wealthy or not. Seeing a lawyer is strongly recommended. If you really want to take it into your own hands, you may consider a Will kit or online Will. But don’t say we didn’t warn you!
We are firmly of the view that with wealth comes responsibility. Being unprepared for this inevitable wealth transfer will likely lead to stress, family disharmony, and considerable expense. Unfortunately, we’ve seen all of these scenarios play out and can confirm it isn’t pretty.
We strongly believe in making informed decisions about the trajectory of your life, especially when those decisions affect those closest to you.
If you don’t think your estate plan is up to scratch, we think an update should be at the top of your New Year’s resolutions list for 2024. Our knowledgeable team will guide you through the process and help you with a tailored estate plan that suits your circumstances. Call us on 1300 654 590 or email us to get started.
Privacy and data protection are under continued pressure
After several high-profile cyber-attacks in 2024, we expect that cyber criminals have made New Year’s resolutions to launch bigger and more damaging cyber-attacks in 2024. We think that this is an unfortunate price that society pays for an increasingly digitalised and connected society.
If you run your own business, you should consider whether your business practices are compliant with the Privacy Act. Certain businesses are required to comply with the Australian Privacy Principles. We think it is wise that all businesses ensure that any data you handle, or store, is appropriately managed. This is particularly important for any personal or sensitive information.
Businesses should also:
- Consider the types of data they are collecting and whether any data collected is surplus to need or unnecessarily exposes the business to risk of data breach.
- If access to certain data needs to be restricted, consider putting in place or updating policies regarding the access of certain data.
- If in doubt, always obtain consent to disclose or release personal information to a third party.
- Ensure that all staff have received appropriate training in cyber and data security.
- If you ever experience a data breach, seek advice immediately. You may be legally required to provide a notification about the breach.
If you are a business owner that is concerned about your obligations with respect to privacy and data security, our team is ready to provide you with practical advice. Call us on 1300 654 590 or email us to get started.
For individuals concerned about privacy, a list of some useful tools and strategies that you may like to employ is available here.
If you are personally entering into any commercial contracts, taking up a new role or are employed in a role that requires you to deal with data, you should consider your contractual obligations with respect to privacy and confidentiality, including with respect to your employment. Where the stakes are high, you should obtain legal advice about what you can do to protect your interests, both now and in the future.
And the best (non-legal) advice we can give you? Think before you speak, share or disclose. Don’t let the temptation of 10% off for signing up to a mailing list convince you to give away valuable personal data. You never know who might get their hands on it!
Workplaces in the spotlight
At the start of 2023, we told you that we thought workplace issues would be on the rise. Following the significant changes to the Fair Work Act in 2022, several amendments to the Act came into effect in 2023.
Of the changes, the three that stand out the most to us are:
- A positive duty on employers to prevent sexual harassment in the workplace;
- The expanded scope of scenarios where flexible work and unpaid parental leave requests can be made; and
- Changes to fixed term contracts, which limit their extensions and renewals unless certain exemptions apply.
We are expecting that 2024 will see more employers being scrutinised for failing to keep up with these changes to the law.
If you run a business with employees, then you should well and truly be across these changes. If you aren’t, don’t hesitate to get on top of these changes. We recommend obtaining legal advice about how the changes to the Act may impact your business and employees. Better late than never!
Even if you feel your business has a good handle on the changes, we think it never hurts to take the time to conduct a first-quarter employment law tune-up. This could mean reviewing workplace policies, updating employment contracts and fresh communication on workplace expectations. Ensuring that your workplace practices are in tip-top shape will no doubt help in making 2024 your best year yet!
We pride ourselves on being competent and fierce advocates for our clients, without losing sight of the bigger picture or letting our egos get in the way of your success. Let us help you make 2024 your best year yet. Call us on 1300 654 590 or email us to get started.