How You Can Leverage Trusts to Retain Multi-Generational Relationships


by Theresa de Leon, EVP, National Director of Sales at Arden Trust Company

There are 73 million baby boomers who currently own more than half of the wealth in the United States. The youngest among them is over 60 years old now, and a massive wealth transfer is underway. 

Cerulli and Associates predicts heirs will inherit $72.6 trillion in assets through 2045. This significant wealth transfer provides an opportunity for financial professionals to identify clients (and AUM) they are potentially at risk of losing. The good news is, this wealth transfer can also provide an opportunity to mitigate risk and demonstrate added value through a comprehensive wealth transfer strategy. Trusts are an ideal part of that strategy and can help simplify the complexities often associated with multi-generational estate and wealth transfers. 

Here are four ways that trusts can benefit your clients and help you to preserve those relationships.

Multigenerational Planning

A trust can serve as a natural bridge from one generation to the next. The right trust vehicle can be used to preserve and protect assets, customize how wealth will be distributed, and address family dynamics while enabling you to gain a more thorough understanding of your client’s values and objectives for the long term.

Understanding the nuance and purpose of various trusts is key to helping a client’s family plan for all situations. For example, Special Needs Trusts are created with the specific purpose of holding assets for a beneficiary with special needs. These types of trusts allow for the beneficiary to access funds that otherwise may put government benefits at risk. Without careful planning, individuals may not qualify for the benefits they need and deserve. Special Needs Trusts can serve to enhance quality of life by providing access to certain therapies, special education, and more services that may not be covered through traditional benefits. Arden Trust Company helps clients with a range of complex family backgrounds and considerations to have peace of mind that they will be taken care of for generations to come.   

Succession Planning

When a family is in the process of succession planning for a business, incorporating a trust can be a great option to help with the transfer of management responsibilities. For financial professionals, this is an opportunity to educate the next generation about their responsibilities, help them understand any complexities, and advise on strategic decisions. Trusts also help avoid conflict among family members, allowing the succession planning process to run smoothly. 

Arden Trust Company provides you with an option for your client that brings fairness and objectivity, lessening emotional factors that may hinder succession planning.

Wealth Preservation

First and foremost, to help preserve wealth, Arden Trust Company ensures clients are meeting a trust’s terms and requirements. This allows you to focus on your client’s overall investment objectives and to develop a long-term investment strategy that will demonstrate your knowledge and understanding of your client’s needs. This will also, in turn, strengthen your relationship with your client and help to build your relationship with family members. Your client can rest assured that you have them on the right track for their investment objectives, without violating any statutory or legal trust requirements. 

Further, trusts provide immense value when dealing with estate taxes. They allow assets to be transferred outside of a traditional will, which can help to avoid probate and potentially reduce estate taxes. Certain types of trusts, like irrevocable trusts and generation-skipping trusts, can provide even greater tax advantages. They can help to protect assets from estate taxes and gift taxes when properly structured, allowing more wealth to be preserved for future generations. Having the back-end support and knowledge that Arden Trust Company can provide takes the extra stress off financial professionals and allows you to focus your attention on managerial tactics to preserve your client’s assets for the future. 

Legacy Planning

Additionally, trusts can act as an instrument for facilitating both foundational and personal philanthropies. Trusts extend personal wealth to philanthropic goals, ensuring a legacy of giving that can live through generations. By establishing a charitable trust, individuals can make meaningful contributions to causes of their choice while receiving tax benefits. There are types of charitable trusts that allow for income to be paid to the charity for a set period of time, with remaining assets eventually going to heirs, or vice versa. For foundations, trusts can provide a structured source of funding, allowing the foundation to plan and carry out its mission over the long term. 

Trusts offer financial professionals a unique planning opportunity and the ability to extend client relationships to the next generation. At Arden Trust Company, we know that the complexities around trusts can be daunting. With a clear understanding of the trust administration process, we are here to provide you with support every step of the way, so that you can best meet the needs of your clients.