Estate Planning for Younger Generations: Bridging Values and Vision

Written by:
Justin Guilder
Devesh Aggarwal
November 3, 2023

In the evolving landscape of wealth management, understanding and integrating the values of Millennials and Generation Z into estate planning is imperative. Their penchant for philanthropy,entrepreneurial vigor, and the trend of embracing marital unions later in life,are aspects that significantly impact estate planning strategies. Tailoring plans to resonate with their values while ensuring asset protection and grow this the crux of modern estate planning.

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Nurturing a Passion for Philanthropic Causes

Today's younger generations exhibit a profound interest in charitable endeavors and societal betterment.Adapting estate plans to embody these altruistic inclinations is a step towards perpetuating a family’s legacy in a meaningful manner.

"The practice of charity will bind us...will bind all men in one great brotherhood." - Conrad Hilton

How to Proceed:

1.    Charitable Distributions:
  • Enable provisions in your estate plans for allocations to non-profit organizations.
  • Establish a donor-advised fund or name a foundation as a beneficiary to ensure a lasting impact.
2.    Family Foundations:
  • For extensive philanthropic ventures, consider setting up a private family foundation.
  • Engage the younger generation on the board to hone their governance skills and influence the foundation's donation strategies.
3.    Professional Management:
  • Employ professional staff to manage the foundation's administration, grants, and investments, encapsulating the family's philanthropic legacy efficiently.

Providing Resources to Support Entrepreneurship

The entrepreneurial spirit runs strong in the veins of many Millennials and Gen Z individuals. An estate plan that fosters this spirit while ensuring prudent asset management is a win-win.

How to Proceed:

1.    Encouraging Entrepreneurial Ventures:
  • Allow for trust distributions to support reasonable business endeavors.
  • Require well-articulated business plans for substantial startup funding requests.

2.    Family Business Transition:

  • Transfer family business interests to a trust, appointing a trustee as an advisor while beneficiaries gain expertise.

3.    Seed Funding Provisions:

  • Detail how a trust can methodically provide seed funding for startups, balancing encouragement with asset protection.

Protecting Wealth Through Later Marriages

With Millennials and Gen Z individuals often choosing to marry later in life, the asset landscape at the time of marriage is more complex.

How to Proceed:

1.    Prenuptial Agreements:
  • o    Advocate for prenuptial agreements to safeguard assets accumulated before marriage.
2.    Separate Property Trusts:
  • Establish separate property trusts to delineate pre-marital assets from those acquired post-marriage,providing clarity in unforeseen circumstances like divorce.
3.    Perpetual Dynasty Trusts:
  • Explore the establishment of dynasty trusts for multi-generational wealth transfer while minimizing tax liabilities.
4.    Professional Trustees:
  • Appoint adept professional trustees to navigate complex family dynamics impartially, ensuring fair asset administration.
5.    Early Beneficiary Involvement:
  • Involve beneficiaries in the planning process to align the estate plan with their values and long-term objectives.

Engaging in estate planning that mirrors the values and aspirations of younger generations not only paves the way for meaningful wealth management but also nurtures a legacy that resonatesthrough generations. In a changing world, it's crucial to update your estate plans to match modern beliefs.

An experienced estate planner can help bridge the communication gap and balance the contemporary values with the modern ideals.

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