Over the next few decades, the United States will witness one of the largest transfers of wealth in history, with estimates suggesting that over $72 trillion will change hands from Baby Boomers to their heirs according to estimates by the consulting firm Cerulli Associates. While this "Great Wealth Transfer" presents opportunities for economic growth and family legacy-building, it also exposes a risk: the alarming number of individuals and families unprepared for the transition. Without proper estate planning, including wills and trusts, families face financial strain, legal complications, and emotional distress. Credit unions are uniquely positioned to support families during this transition by leveraging their longstanding community ties and commitment to member well-being.
The intergenerational wealth transfer landscape
The coming wave of wealth transfer
The Baby Boomer generation holds a significant portion of the nation's wealth, amassed through homeownership, retirement savings, and investments. As this wealth shifts to younger generations, it encompasses assets such as real estate, retirement accounts, personal investments, family businesses, and more. This will be a unique opportunity to ensure financial security for future generations and preserve family legacies.
The risks of not having a will or estate plan
Failing to prepare for wealth transfer can have far-reaching consequences for members and their families:
- Financial consequences: Without a will, assets may need to go through probate, which we know is a time-consuming and costly legal process. Probate fees, legal costs, and taxes can significantly erode the value of an estate by thousands of dollars. Additionally, delays can prevent heirs from accessing funds when they need them most.
- Family conflict: The absence of clear directives can lead to disputes among family members. Even in very close-knit families, different expectations around how assets will be distributed can cause lasting rifts.
- Inequitable distribution: State laws determine how assets are divided if there's no will, despite the deceased’s specific wishes. This can result in unintended outcomes, such as disinheriting non-biological children or failing to provide for vulnerable dependents.
We often speak with users and community partners about the frustrating experience of going through probate. One of our users endured a 3-year legal battle for the title of his grandfather’s prized Harley-Davidson—a process he quickly learned could have been avoided if there was an estate plan in place.
Common barriers to estate planning
According to the 2024 Wills and Estate Planning Study from Caring.com, only 32% of adults reported having an estate plan in 2024.
Despite the risks, many people delay or avoid estate planning due to:
- Procrastination and discomfort: Discussing death and financial matters can be uncomfortable, as it is not easy to acknowledge our mortality. This leads many to postpone planning until it’s too late.
- Perceived complexity and cost: Estate planning can seem overwhelming and expensive, deterring individuals from taking the necessary steps to begin the process
- Misconceptions: A common belief is, "I don’t have enough assets to need a will." In reality, people from all socio-economic statuses can benefit from estate planning, especially if they have dependents. For example, a will allows a parent to name a guardian for their children. Without one, the court decides who must care for them, which may not align with the parent's wishes.
Why credit unions are uniquely positioned to support their members
Deep member relationships
Credit unions build strong, community-based relationships, often serving multiple generations within families. This trust makes credit unions well-suited to initiate sensitive conversations about estate planning, helping members feel supported and understood.
Financial education as a core mission
Financial literacy is central to the credit union ethos, and extending educational efforts to include estate planning aligns naturally with this mission. Credit unions can offer workshops, webinars, and personalized consultations to demystify wills, trusts, and legacy planning.
Partnering for impact
Credit unions can collaborate with estate planning attorneys, financial advisors, and legal aid organizations to provide comprehensive support. These partnerships can offer members access to discounted services, legal clinics, and estate planning tools tailored to their needs.
Conclusion
The intergenerational wealth transfer is already underway, and the stakes are high. Estate planning isn’t just a legal task; it’s a vital component of holistic financial wellness. By integrating estate planning into your financial wellness programs, credit unions can help members secure their families' futures, providing peace of mind alongside financial security.
Credit unions have a unique opportunity to step up as trusted advisors, supporting their members through the complexities of estate planning. By doing so, they can both strengthen their communities and reinforce their role as lifelong partners in their members’ financial journeys.
Peacefully is an an all-in-one platform offered to credit unions to support members in planning for the future and expertly settling affairs after losing a loved one. We take a holistic approach to estate planning, offering legal documents as well as a secure, comprehensive vault where members can share their wishes and important information with their designated deputies. If you are interested in learning more, reach out to schedule a demo here.
