Generational shifts in attitudes, preferences and behaviors are reshaping many aspects of life in the western world and the estate planning process is no exception, say wealth managers Northern Trust.
Experts in providing wealth management and international trust solutions to individuals, families and institutions, Northern Trust has more than a century of knowledge in this area.
Their experts report an increase in Backing this up, one of the most Hugh Magill, Executive Vice President and “generational” wealth management, fueled frightening statistics facing any wealthy Chief Fiduciary Officer at Northern Trust in part by rising asset values and a desire entrepreneur is that 70 percent of wealthy recognizes that wealth managers must also from clients to make sure that their wealthy families lose their wealth by the second change the traditional approach to wealth
is managed effectively and transferred on generation and a stunning 90 percent by the management. “A good wealth manager needs to the next generation intact. Most wealthy third. To overcome these odds, a sustainable to consider the modern family structure, entrepreneurs want to make their money strategy needs to be put in place by the first increases in clients’ life expectancy, and last not just for their own lives, but also for generation to ensure that the wealth lasts the rise of second marriages, along with the generations of their family to come, but for several generations. increase in age-gaps for second marriages,” there is a saying among wealth managers: Hugh explains. “The first generation makes it, the second generation spends it, and the third generation loses it.”
Note Couples with age differences of five years or less not shown. A first marriage is one in which neither spouse has been previously married. A remarriage includes at least one spouse who has been married before. Based on marriage that began in the past 12 months. Based on couples, not individuals, where at least one spouse is age 18 or older. Source Livingston, G (2014, November 13). Four-in-Ten Couples are Saying “I Do,” Again. Pew Research Center.
A BLENDED, MULTI-GENERATIONAL FAMILY
With large age gaps in remarriage, it is not uncommon for a blended family of spouses and children to cover four generations
Those who created the wealth, including traditionalists born in the first half of the 20th century, and baby boomers born between 1946 and 1964, often have a different attitude toward wealth compared with the Generation X and Millennials who have become their inheritors. The traditionalists are work-centered while the younger generation is life-centered.
Trusts which will effectively bridge the gap between more traditional wealth creators and their younger beneficiaries should “speak” about the values underlying the creation of the wealth, aspirations for how it will contribute to beneficiaries’ well being, and equip trustees with greater discretion to adopt trusts’ management for the evolving needs of modern families.
Redefining Family Wealth
Historically, estate planning has been predominantly focused on the financial aspect of legacies. But when families think more holistically about their wealth, their plans for their financial wealth can become more closely aligned with their values and aspirations. Ultimately, it’s about finding a model that works for the entire family, bridging any differences and communicating wealth’s purpose for generations to come.
Talk to an estate planning advisor who has experience in creating solutions for contemporary families, such as the experts at Northern Trust.