New Article: Wealth Transfer - Helping Credit Unions' Members Plan for the Future

Wealth Transfer: Helping Credit Unions’ Members Plan for the Future

Dec 7, 2023

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The “Great Wealth Transfer” era has begun, and it’s crucial we help credit union members prepare.

A recent report from Boston-based financial research firm Cerulli Associates projects that $84.4 trillion will transfer hands from aging family members to other family members and charities by 2045. This astonishing number would be the largest wealth transfer in history, and we need to help members plan for a seamless transition.  If we are not there for our members, they will find the help they need.  Unfortunately, it may be with a competitor who is not looking out for their best interests.

So who’s leaving their wealth behind? We are losing more of the Greatest Generation (born 1901-1927) and the Silent Generation (born between mid 1920s-1940s), and more of the boomers (born 1946-1964) are leaving the workforce.  These assets include credit union deposits, real estate, business ventures, insurance products as well as investment securities like stocks, bonds and mutual funds.

Their collective wealth is being transferred to young generations and charities through things like trusts, wills, and other estate planning tools.

Because of this generational shift, more people are thinking about their own mortality, including who they have designated to make their healthcare decisions, their estate plans and their beneficiaries. As Americans explore answers to these questions, it can spark needed conversation and new opportunities for credit unions to serve their members through partners like First Community Trust.

A report from Kiplinger Personal Finance underscores that communication is key:

  • 52% of U.S. adults have not made a will
  • 40% of parents haven’t talked to family about their estate planning needs
  • 28% of those surveyed “know their own parents’ legacy wishes”
  • The average American saves less than 50% of an inheritance

However, barriers exist that can prevent proper wealth transfer planning. For example, 61% of adults are not comfortable sharing financial information with their children and 43% are inexperienced with multigenerational wealth strategies.

Helping secure the next generation’s wealth and avoid pitfalls is an important service credit unions can provide. There have been unfortunate situations where improper planning has caused pain for families who have not been able to fulfill their loved ones wishes due to legalities in documentation.

Credit unions can partner with trusted financial planners to help members plan for the future to guarantee a seamless transfer of wealth to their loved ones and charities of choice. Ensuring that the right plan is in place can help the member controls what happens, protect vulnerable beneficiaries, get property to loved ones quickly, save loved ones from the need to make difficult decisions, minimize family arguments/messes and help support their legacy through charitable causes they care about.

Together, we can help credit union members plan for the future and enhance their peace of mind through building trusted relationships, compassionate customer service, needed education, the right products/services, and communication to the next generation.