The nature of estate and legacy planning is changing in the modern world at a fairly rapid pace. With new technology, changing economic circumstances and a shifting legal landscape, we've noticed that individuals are having to come up with ever more inventive ways of efficiently managing their estate and inheritance.
According to a recent article we came across in the Wall Street Journal, one of the key issues is for people to begin planning far in advance – and look even further into the future if their wealth is to last for a long time for a few generations to enjoy. The article notes that financial advisors and estate-planning professionals have been witnessing an increase in the number of clients fretting over what the future holds and the position in which this places their family – and are therefore looking beyond the next generation and far into the years to come.
Matthew Brady, the senior director of wealth planning for Wells Fargo Private Bank, said: "People, especially the first generation to have wealth, do have concerns about the future and they aren't used to thinking in multigenerational terms."
He noted that it can take time for these first-generation high net worth individuals to adjust to thinking about creating a lasting legacy beyond simply handing over their assets to their immediate descendants.
Suzanne Shier, chief tax strategist at Northern Trust Wealth Management, claims that this is where flexibility comes into play: "We're increasingly seeing trust documents where multiple means for increasing flexibility are built into a single document", she said.
Other practices include decanting – moving assets from an old trust into a new one – and setting up a multigenerational trust. Implementing new powers of appointment is another option some individuals are considering to ensure the longevity of their legacy.
Do you think the consideration of future generations is becoming more important when it comes to modern estate planning? How do you think individuals can effectively manage their legacy for the decades to come?