The odds of receiving a large inheritance are becoming less likely with people living longer and more parents giving money to children while still alive to help them get on the property ladder or out of debt.

Jim McIlroy, the Public Trust's estates manager, said inheritances tended to reflect society and the times we live in.

"Depression, world war, conflicts produced a generation who had a strong desire to pass on wealth to the next generation and a will was a means of doing this," he said.

"Parents wanted a better life for their children - a generation of children emerged who were often financially better off than their parents, which lessened the desire for parents to accumulate assets to pass on to the next generation.


"Parents began to spend or transfer wealth during their lifetime."

McIlroy said New Zealand's move towards user pays had resulted in an explosion of family trusts and the transfer of assets as people tried to get around paying for their own care in old age. That decreased when rest-home subsidy limits were increased.

But McIlroy said the latest social problem was a younger generation struggling with student debt and long-term rent issues. "It will be interesting to see how parents react to this." He suggested it could include advances or loans and cash gifts to children to help them "get on" with life.

The abolition of gift duty had made the transfer of wealth and forgiveness of debt to the next generation much easier than in the past, when there was a limit to how much people could give without being taxed.

Typically, about 95 per cent of people left an inheritance to their children, McIlroy said.

Under the Family Protection Act, people legally have to ensure there is provision for their dependants if they have an estate, and if the distribution is uneven or leaves out a child it should be spelled out why in the will otherwise it can be contested.

But children do not have any rights to know what is in the will until after a person dies and it goes through the probate process.

McIlroy said a lack of proper estate planning, especially where there were blended families with children from two or more marriages, was a major issue.

He said people were also having to spend a lot of their estate on care as they lived for longer.

David Boyle, group manager investor education for the Commission for Financial Capability (formerly the Retirement Commission) believes this will cause a major dent in inheritances in the future.

"I believe that inheritance in the future being passed down to the next generation will be less. This is because we are living longer and will need our savings and assets to maintain our quality of life."

Boyle said it was possible children could reach retirement while their parents or parent were still alive.

"This means that those children who are getting closer to retirement now cannot automatically assume that they will get a nice lump sum from the family estate as often as has occurred in the past."