The "Bank of Mum and Dad" is also creating a surge in disputes over estates, family loans and relationship breakdowns. Pic Envato

Australia is entering one of the largest intergenerational wealth transfers in its history and the implications for the property market are enormous.

New analysis from the Bankwest Curtin Economics Centre shows Baby Boomers now control a record $6 trillion in private wealth, representing close to a third of Australia's total household net worth. Much of that wealth sits in property. Roughly $2.8 trillion is tied up in real estate, largely in homes that are owned outright after decades of house price growth. As that wealth gradually moves to younger generations through inheritances and financial assistance, it is reshaping who can buy property and who can't.

But legal experts say the rise of the "Bank of Mum and Dad" is also creating a surge in disputes over estates, family loans and relationship breakdowns, with billions potentially at risk of ending up in courtrooms rather than property deposits.

A $6 trillion generational divide

The numbers highlight just how concentrated wealth has become among older Australians. Despite making up only about 17 per cent of the population, Baby Boomers hold a disproportionate share of the country's wealth, a position that has grown dramatically over the past two decades. According to the BCEC data, Boomer wealth has surged by about 840 per cent since 2002, driven largely by rising home values and strong superannuation balances. Researchers estimate that about $3.5 trillion could change hands by 2045, as assets pass to Gen X and Millennial beneficiaries. That equates to roughly $175 billion a year already flowing between generations through inheritances, "warm" gifts or financial support given while parents are still alive.

Mortgage broker at Two Red Shoes Brett Sutton says the impact on the property market is impossible to ignore.

"In my experience as a mortgage broker, about eight out of ten first-home buyers are receiving some form of assistance from their parents," Sutton says. "Without the Bank of Mum and Dad, the entry-level market would effectively freeze."

"It's becoming increasingly common to see parents gifting deposits of $200,000 or more, particularly in markets like Sydney where the deposit required to enter the market can be substantial. Saving a deposit while paying market rent and dealing with the rising cost of living has become incredibly challenging, particularly in major cities. For many young buyers today, family support can be the difference between buying a home in two years versus 10."

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The inheritance expectations rising with house prices

But the growing reliance on family wealth is also changing expectations around inheritance. Legal specialists say that shift in expectations is driving a surge in estate disputes.

Luisa Di Bernardo, managing associate at Armstrong Legal, says courts are seeing more family provision claims and legal challenges from relatives who believe they were unfairly excluded from a will. "We aren't just expecting a rise, the data shows it's already happening. In the NSW Supreme Court alone, Family Provision claims have jumped from 880 in 2020 to nearly 1,000 in 2024. "

"In today's climate, emotions are magnified by financial need," she says. "In the past, an inheritance might have been something people hoped for later in life. Now for many people it is part of their financial planning."

A common misconception is that leaving a small token gift to a child prevents a will from being challenged. "When an inheritance becomes a survival strategy rather than a gift, the incentive to contest a will skyrockets. Even households earning over $200,000 are feeling the pressure of mortgages, which is expanding the pool of people who feel they haven't been adequately provided for," says Di Bernardo.

When the family home becomes the battleground

The family home is frequently the centre of these disputes. With the median value of houses in many Australian cities pushing past the $1 million mark, a single property often represents the largest and sometimes only asset in an estate.That can create tension when siblings receive equal shares but have very different financial circumstances.

If one child has acted as a long-term carer for a parent, or is struggling financially while another sibling is financially secure, disagreements can escalate quickly.

"Property is the primary battlefield because, for most Australians, the family home is the estate. Challenges often arise when a Will tries to be 'equal' in an 'unequal' world," Di Bernardo says.

"If one child has been a long-term carer or is struggling financially while another is well-off, the fairness of a 50/50 split is often called into question. We also see 'Contentious Probate' filings over the validity of a will on the rise - up nearly 60 per cent since 2020. These involve disputes over whether the person was of sound mind or was pressured into changing their Will. When a family home worth $2 million is at stake, a dispute that costs $100,000 in legal fees suddenly feels like a risk some are willing to take, even though that 'whittling away' of the estate helps no one in the long run."

The divorce risk many families overlook

Another major risk to inherited wealth arises not in probate court, but in the family court system. Many Australians assume inheritances are automatically protected during divorce proceedings but that isn't necessarily the case. Elise Fordham, principal lawyer at Australian Family Lawyers, says inheritance can still be considered part of the asset pool when a relationship breaks down. "The Family Court doesn't simply ignore money because it came from your parents," she says.

One of the biggest mistakes families make is mixing inheritance money with joint assets. "If you receive a $500,000 inheritance and immediately put it towards the family home or a renovation, that money becomes intertwined with the relationship," Fordham explains. "Once funds are used for the benefit of both partners, they can lose their separate status."

In practical terms, that means part of a parent's financial gift could end up being divided between former partners if a relationship breaks down. As the financial stakes grow, many parents are becoming more strategic about how they support their children. Rather than providing simple cash gifts, lawyers and financial advisers say families are increasingly putting formal structures in place to protect wealth.

"We are seeing a major shift in how the 'Bank of Mum and Dad' operates, Ms Fordham says. " It's no longer just a handshake and a bank transfer; parents are increasingly making their financial support conditional on their children signing a BFA. It isn't about being cynical, it's about treating the family legacy like a business asset. Families want to ensure that if a marriage dissolves, the inheritance stays in the bloodline rather than being divided in a court-ordered settlement."

By registering the loan against the property title, parents ensure the money must be repaid if the property is sold or if the borrower separates from a partner. Another option is using family trusts, which allow children to benefit from wealth without technically owning the assets directly. Trust structures can provide greater protection from relationship breakdowns or creditor claims.There is also a growing trend toward parents funding professional advice instead of deposits, such as paying for buyers' agents or financial planners to help children navigate complex property markets. The idea is to reduce the risk of costly mistakes in a competitive housing environment.

Protecting family wealth before disputes arise

For families navigating large financial transfers, legal experts say early planning can help avoid disputes later. "If you want to protect your children's future, the best advice is often; get legal advice from a family law specialist before you do anything. Giving a lump sum can be like handing over a target in a divorce. Instead, we see families using Trusts or secured loans or the parties entering into a BFA which dictates where the money is used, and how it is treated in a separation. By keeping the wealth within some trust structures, the child benefits from the money without 'owning' it in a way that the Family Court can label an asset of them capable of being split. It's about building a 'legal fence' around the family's hard-earned wealth before the next generation even touches it."

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How to protect your property inheritance from family court battles