Everyone has been talking about the "Great Wealth Transfer." One common concern, can the next generation's needs can be met by today's trustee and fiduciary service providers? Will the system that has been in place for the last 30 years be able to evolve?
The coming generation(s) are far more global and complex than the ones before them. Our instant gratification society has put anything they need or want at their fingertips. Millennials tend to be less likely to forge long-term relationships with trustees. There is no such thing as a one-size-fits-all approach to the needs of the next generation. Advisors need to meet Millennials where they are. There is one thing that the following generation values, its convenience. Today's advisors must keep up with technology to compete and retain the new generation(s) to come.
Here are ten recommendations we suggest to support the next generation of wealth holders:
Have a trust structure summary prepared. Educate millennials about their inheritance. They need to know the terms of the trust, the roles, and everyone's responsibilities. Explain all of the current investments that are being held by the trust to them in detail.
Plan a meeting with the next-gen. Go into depth about any potential conflicts of interest that could arise—address possible changes in health, education, or family circumstances.
Look at the current trust structure and determine if it needs any modifications to meet the next generation's wants and needs.
Look at the current trust fund investments and determine if they align with their goals and ambitions.
Keep an open mind and be forward-thinking. Modern lifestyles can include same-sex families, children from unmarried couples, and so many other variables. Are there grounds for a trust modification due to outdated views or restrictions (settlor's)?
Keep focusing on future growth and values. In other words, can the growth of the trust fund keep up with the beneficiaries of the next-gen and class size?
Clarify the potential impacts of pre-nuptial agreements. Create a plan for possible distributions out of the trust fund. Define how these distributions will be the least disruptive to the remaining investments.
Make sure to clarify who wants to remain a beneficiary. Keep in mind a new trust may be more feasible in order to adhere to the need for everyone's individual goals.
Get innovative when needed. Maybe a private trust company needs to be established to act as co-trustees.
Adapt, adapt, adapt! Millenniums expect quick responses and information readily available at all times. Your firm needs to adapt its technology to meet these needs.