In today’s complex financial landscape, trust services are an integral part of estate planning and wealth management for families of all sizes. The primary goal of trust services is to protect and grow the estate for future generations. However, at Whittier Trust, we’ve found that the best trust services go beyond mere financial management.
Over the years, our advisors have recognized the importance of educating all generations involved in the estate, from the head of the family to their children and even to their grandchildren. We explore why comprehensive trust services that make education a priority are invaluable for preserving wealth and fostering financial literacy across generations.
Preparing For Wealth Transition And New Roles
Transition periods within an estate’s history hold immense significance for any family. It’s not just assets that will now weigh on a new generation, but the expansive responsibilities they inherit. This transition can be daunting, not only for the grantor and the trustee but for the whole family. Through educational programs and mentorship, a wealth management office can impart financial and wealth education throughout their lives, helping prepare the next generation for this transition and ensuring a smooth and well-informed shift in roles.
A good wealth management firm will begin this education early. In the early development years (0-6), they will focus on setting a strong foundation through parental example, teaching delayed gratification, and introducing the concept of money and saving.
During the pre-teen years (7-13), the emphasis shifts to nurturing character traits like work ethic and curiosity while introducing basic financial concepts such as investing and even simple entrepreneurship through endeavors like a lemonade stand.
High school and college years (14-22) are critical for guiding important life decisions, such as college choices and career paths, and facilitating internships or entry-level positions within family-owned businesses.
Finally, as young adults (23+), the focus is on letting them navigate their own journey, supported by shared values, an understanding of family history, and transparent communication about estate planning and succession, ultimately aiming for them to become responsible stewards of family assets for future generations.
Preserving Family Values
A family’s values are often intricately tied to its wealth. The best trust services understand this connection and work to ensure that the values and principles upheld by those who built and grew the estate are passed down to those who will be responsible for its stewardship next and the generations after.
It’s important to facilitate open and honest discussions about family principles, and wealth management advisors with experience have tools at their disposal to encourage beneficiaries to appreciate the significance of not only the wealth they inherit but also the decisions they will need to make as stewards of the family legacy.
Including the whole family as active participants in the estate creates a reinforced sense of purpose and responsibility among all stakeholders.
Many families hold a strong commitment to philanthropy, striving to make meaningful contributions to their communities, and a wealth management advisor can serve as a pivotal catalyst in nurturing philanthropic engagement among beneficiaries.
Not only can advisors impart valuable knowledge about charitable giving strategies, impact investing, and the significance of effecting positive change, but committed advisors will also help to identify unique opportunities for experiential learning.
Through these experiences and education, beneficiaries not only contribute to their communities but also gain invaluable insights and experiences. By instilling a profound sense of social responsibility, a trusted advisor can actively encourage beneficiaries to evolve into engaged and well-informed philanthropists poised to carry forward their family’s enduring legacy.
Education can also be a powerful tool in conflict resolution within the family. Not only does third-party guidance help to mitigate the negative effects of competing desires, imbalances of decision-making authority, and conflicts of interest, but it can also work preventatively.
Wealth management advisors who prioritize education can provide the tools and resources necessary to help beneficiaries navigate disagreements and competing interests, fostering open and productive communication. Fractured families tend not to maintain their estates very well.
Through conflict resolution education, families can learn or relearn to work together harmoniously, ensuring they don’t get in their own way when working to preserve their wealth or their relationships.
Adapting To Changing Times
The financial landscape continues to evolve, with new investment opportunities, tax laws, and economic challenges arising every day. It’s the mandate of a wealth management company to make sure their clients are well educated on these variables, providing regular updates on the trust’s performance, investment strategies, and any adjustments needed to align with current financial trends and legislative mandates.
The right advisors take their stewardship duties seriously, knowing that a personalized and specific approach ensures that the family remains adaptive and responsive to changing times. Prioritizing education not only keeps clients informed about these changes but prepares them for the big decisions they’ll have to make, especially in the face of uncertainty.
Although Whittier Trust adapts to the landscape as necessary, our advisors have found an advantage in placing an emphasis on proactivity. In practice, this looks like measuring strategic plans with values and current realities, not riding the headlines nor the highs and lows, but constantly evaluating the underlying trends. It also looks like a wealth management firm that reaches out to its clients to have conversations about what these factors mean rather than the other way around.
Ensuring A Lasting Legacy
Ultimately, the best trust services understand that preserving wealth is about more than just financial assets; it’s about preserving a family’s legacy. Education is the key to ensuring that this legacy endures for generations to come. By equipping beneficiaries with the knowledge and skills to manage their wealth responsibly, trust services contribute to the long-term success and sustainability of the family’s estate and well-being.