WA MAGAZINE JanFeb PDF A - Flipbook - Page 8
UPFRONT
Where the
wealth will be
NEXT GENERATION
Estate Planning R.I.P.
I
f Schwab is right, we can add the
traditional “transfer on death”
inheritance to the list of things
millennials have been accused of
killing.
Apparently, nearly all younger
high-net-worth (HNW) people want
to start winding down their worldly
wealth while they’re still alive to enjoy the results. Granted, few of them
are committed to giving it all away
right now, but they’d like to start.
The younger they get, the less
enthusiastic they are about making
a big posthumous bequest. They’re
more interested in spending what
they can and sharing with the people
around them.
This means smart gifting and
generation-skipping transfers can be
in play at life stages that previously
wouldn’t have worried much about
where the wealth ultimately goes.
And along with that, philanthropy
becomes a factor at an age when
most donor-advised funds are grandma’s bright idea.
8 | JAN/FEB 2025
This change is significant. The
coming generational wealth transfer
might be the last time we need to
worry about family money moving
in big binary leaps where you either
have it or you don’t.
Instead, the future looks more like
a world of dials distributing assets
away from the core across the family
and favorite causes. This is good for
irrevocable trusts that can accept
and disperse wealth at a remove
from the original donor.
Theoretically, it’s bad for life
insurance that revolves around
the death benefit, which is why it’s
initially shocking that young people
expect to use a lot of coverage to
structure the postmortem piece.
But then again, they’re also young
enough to need to protect dependents if they die early.
And of course there’s still a
lot of time before Young Money
really grapples with mortality (and
retirement costs), so the attitudes
can always change. Boomers have
managed to spend a lot of their
wealth already.
Either way, Schwab is
getting ready for the shift by
beefing up its estate and
legacy planning support to
make sure big clients can
structure their “living will”
now. Reading between the
lines, they’re also looking
hard at heir education
because so many of these
bequests will come with
strings attached.
You should be there
too. If you’ve recently
inherited next-generation
clients yourself, don’t assume they think like their
parents or grandparents.
S
ource of projected estate assets by generation, according
to the latest Schwab HNW
survey. These numbers are self reported and may be somewhere between
unrealistic (all that cash) and shocking
(don’t millennials love stocks?), but it’s
a handy guide to what younger clients
expect to leave behind.
5%
24%
19%
BOOMERS
52%
15%
17%
52%
GEN X
16%
15%
22%
MILLENNIALS
47%
16%
REAL ESTATE
CASH
INVESTMENTS
INSURANCE
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