The Millionaire Myth and How to Create an Immediate Inheritance for the People You Love (No Lottery Win Required)

What to do before you’re really rich

Good things, they say take time, but that's not going to work when it comes to protecting your family's future. Some things, especially when it comes to protecting and providing, have to be the priority, and even have an element of urgency.

But what if I can't afford it, yet? What if I'm not rich enough, yet?

What if, ... and the list will go on.

Read in this article

This is where a financial tool Life a Life Insurance Policy and an Estate Planning Tool called a Protective Will document, can work perfectly together to help you create an Immediate Inheritance. Want to see how that works? Read on.

The Millionaire Myth: An Immediate Inheritance for Your Family

Most of us feel like we are on a financial tightrope, juggling a mortgage, family costs, and trying to build a secure future. We want to provide for our loved ones and give them a head start in life. With today’s cost of living, the idea of leaving a large inheritance can feel like a distant dream reserved for the wealthy.

But you do not need to be a millionaire to leave a meaningful legacy. You can create a substantial, immediate inheritance for your family right now, regardless of your current bank balance. This is not magic; it is smart planning.

Your First Foundation: The Life Insurance Policy

Think of a life insurance policy as a financial safety net. If you were to pass away, it provides a lump sum payment to your family (or whoever you nominate). This money can replace your income, cover the mortgage, (payout a business debt), pay for school fees, and handle the ongoing expenses that do not stop.

To put it in perspective, a 40 year old trying to save $500,000 would need to put away more than $15,000 every year for two decades (and resist the temptation to use it while still paying tax on its interest). A life insurance policy provides that sum immediately.

The key is to formally nominate in the policy documentation the person you want to receive the payout. This creates an 'immediate inheritance' effect. Because the money is paid directly to your beneficiary, it generally bypasses your Will (and a challenge to the Will) and avoids lengthy legal delays. The funds can be in your loved one’s bank account much faster, often when they are needed most. In Australia, these payouts are also typically tax free, meaning the money stays with your family.

Your Second Layer: The Protective Will

Many people think a basic Will from a kit is enough, but this can be a dangerous assumption (and don't get me starting in the tragedy that can be a Post Office Kit). A simple Will is a start, but a Protective Will is a complete plan. It uses strategies like testamentary trusts to protect your assets and, just as importantly, the beneficiaries who will receive them.

• In simple terms, a Protective Will can shield an inheritance from your beneficiary’s future creditors, legal claims, or potential bankruptcy. It also creates opportunities for tax effective income splitting for your family.
• A Protective Will works alongside your Life Insurance. The insurance provides the immediate cash, and the Will provides the detailed roadmap for everything else, ensuring your legacy is protected exactly as you intended.

Supporting Blended Families

This two step strategy is also a clever way to ensure everyone in a blended family is looked after. You can use life insurance to provide for step children directly or to equalise what each beneficiary receives. This avoids relying on a Will that could be contested later.

If you pass away without a Will document, you’re said to have ‘died Intestate'. The government's plan to divide you estate assets kicks in (and you'll probably won't like the plan). The formal Intestacy Laws vary by state and territory. Many people are not aware Intestacy Rules extinguish the inheritance rights of step children.

Why We Avoid 'The Talk' (And Why We Shouldn't)

Let’s face it, nobody loves talking about this stuff (present company excepted) until you realise how it's just a financial structure that can act like temporary scaffolding, until you’ve made your wealth.

So let's remake the conversation and see it for the very practical and useful way it can help you protect and provide immediately - so you can focus on working, investing, taking risks and doing all the things that a bigger life leads to - secure in the knowledge that if life doesn't work out just the way you want, there is a backup plan in place, just in case, and you have created an immediate inheritance for your family.

But let's reframe the conversation. This isn't about planning for the worst. It’s about empowering your family to live with confidence, knowing their future is secure no matter what. It’s about planning for their life to continue.

We believe that financial security isn't just for the wealthy.

For the visual learners, below is a sample decision map about Planning an Immediate Inheritance.

Choose your Method to Fund the Inheritance: Save it or Insure it?

Funding

Decide if you want to create an inheritance and the method you will use to achieve that.

• Save $1,000,000, place in bank account and document in your Will how you want it distributed, OR
• Establish a $1,000,000 Life Insurance policy and name the beneficiary(s) in the policy or, better still, in your Protective Will.

Strategy

Save the inheritance amount, or create an Immediate Inheritance with a financial tool like, Life Insurance.

• Decide upon the Amount of Inheritance required
• Decide the number of Inheritance Beneficiaries and their split
• Decide the Payment Method for the insurance premiums

Decision Maintenance

• Adjust the Amount Required, as needed
• Adjust the Inheritance Beneficiaries, as needed
• Stay connected to your financial advisor as Inheritance laws can change and evolve

Planning for your family's future shouldn't be about focusing on the worst-case scenario. Instead, it’s about empowering your family to live with confidence, knowing their future has a layer of security no matter what.

You can think of this structure as temporary scaffolding. It provides immediate protection, allowing you to focus on working, investing, and building a bigger life, secure in the knowledge that a backup plan is in place. Financial security isn't just for the wealthy.

By taking these two fundamental steps - establishing life insurance and either nominating the Life Insurance beneficiary directly or nominating them through a Protective Will Structure, you can go a long way towards establishing an immediate and protected inheritance for your loved ones.

Drew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn.  Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.