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Digital Estate Planning Empowers Your Customers to Avoid These 3 Mistakes

Estate planning is a task easily set aside amid the demands of daily life. But life will indeed end, and your customers should have a proper estate plan in place. Even when their assets are modest and require a simple will, it is crucial for every working adult who would like to ensure what happens to their family and their assets after they’re gone.

Only about one-third of all Americans have created a formal estate plan. For the two-thirds who do not have one, that’s a serious problem for them and their families. It is also an opportunity for financial services providers, like wealth managers, financial advisors, credit unions and banks to step up with solutions that combine digital ease and personal touch to make estate planning accessible and affordable for everyone.

Your trusted relationship as a financial services provider gives you the perfect segue to help your customers and members avoid some estate planning mistakes that can cause their loved ones stress, conflict, expenses and other headaches down the road.

Here are three mistakes you can help your customers/members avoid:

1. Not Having an Estate Plan 

The biggest mistake – and most common – is doing nothing. About two-thirds of Americans do not have an estate plan, such as a will or trust. Without a legally valid estate plan, state intestacy laws require assets to be distributed by a probate court.

That costs time and money and heightens already frayed feelings. Family members and others with claims can tie things up over what others might consider surprisingly small amounts. Help your members and customers avoid that situation.

Also, not having a will can leave the court to decide about guardianship for minor children. A will or trust will establish the parents’ desires for who should continue caring for their children should they pass while the children are still minors.

2. Not Keeping Your Estate Plan Up-To-Date

Things happen. Customer and members’ life changes like marriage, divorce, new children and stepchildren, and changes in income and assets can change how a person wants their estate handled.

But wills are easy to set and forget, never revisited until it’s time for their execution. To ensure the plans are current, estate documents should be reviewed every couple of years or so and after significant life events.

A plan based on outdated wishes can lead to disputes between family members down the line. Offering estate planning documents that are easy to update will help keep your customers and members’ plans current and smooth out what could be a bumpy process.

3. Not Communicating the Estate Plan

Conversations about estates are always challenging, but they are ones we must encourage as responsible financial services providers. They are fraught with potential hard feelings about who gets what, of course, not to mention the difficulty of recognizing the eventual loss of a parent while both parent and child are very much alive. Not fun.

However, these conversations are essential for holistic financial wellness. Loved ones need to know what to do when that time comes. They should have access to critical documents and open conversations to avoid any confusion. That includes ensuring the documents remain up to date.

How Digital Estate Planning Can Create Winning Outcomes

As a trusted financial services provider, you can offer your customers and members digital estate planning solutions like OneDigitalTrust. We’ve built a robust platform that allows end users to create wills, trusts, power of attorney, healthcare directives and much more. Users truly appreciate the document tracking capabilities and digital vault for organizing the process and storing the documents.

Meanwhile, you are provided access to real-time, smart analytics to deepen relationships with customers and generate a new source of non-interest income. And because our platform is white labeled, you can offer it under your brand, and users know your organization is there to care for them and their families.

Many estate planning mistakes occur due to a lack of education and proper guidance, fear of acknowledging our human mortality, and consumers’ expectations of the cost of estate planning. OneDigitalTrust removes the lawyer from the equation, making creating legally valid estate planning documents much more affordable. We help you make it easy for the mass affluent to access compliant, responsible, plain-language estate planning. Integrating a trusted solution like OneDigitalTrust can help those who trust you achieve and maintain peace of mind around what can be such a sensitive and complicated subject, one all too easy to ignore otherwise.

170M Americans need an estate plan. OneDigitalTrust offers a white-label, turnkey estate planning platform with pricing options tailored to the needs of individual banks, credit unions, financial advisors, wealth managers, insurance companies, HR benefits providers and more.

Contact us today to learn more!

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Finding Opportunity in 2024’s Challenges to Non-Interest Income

Through years of falling interest rates that dramatically compressed net interest margins, credit unions and banks learned to lean into non-interest income to keep the balance sheet, well, balanced.

Debit and ATM transaction fees and overdraft and Not Sufficient Funds (NSF) charges have become particularly important, especially as account maintenance fees such as monthly service charges and minimum balance penalties have lost popularity for competitive reasons and consumer disdain.

Regulatory and legislative actions, however, could sharply impact that cash flow and strategy as the Consumer Financial Protection Bureau (CFPB) moves forward on its proposal to eliminate so-called “junk fees,” which includes overdraft fees, and a bid to reduce interchange fees is before Congress again.

Meanwhile, the potential for predictable, stable, and increasing non-interest income (NII) continues to grow. In this regard, offering customers and members access to an enterprise-grade digital estate planning platform can serve both – promote personal financial wellness while also producing a remarkable, new NII revenue stream. 

But first, here’s a bit more on the regulatory and legislative front as 2024 begins to roll out.

CFPB and overdraft fees

The CFPB is expected to issue a final rule soon that could accelerate the decline of overdraft and NSF income, which are already about half of what they were industry-wide before the pandemic.

The new rule is expected to say that overdraft fees should be considered finance charges under Regulation Z. That could result in regulators such as the FDIC, OCC and NCUA tightening the rules on the number of times an overdraft or NSF transaction can occur and how much a bank or credit union can charge.

Recent fines totaling hundreds of millions of dollars against mega banks all the way down to smaller banks and credit unions for their NSF and overdraft protections also point to the need for diversifying non-interest income.

The interchange fee fight continues

Congress again has before it two bills aimed at lowering the interchange fees that banks, credit unions and the card processing networks share for their role in card transactions.

Proponents, led by retailers and consumer advocates, say the Debit Interchange and Price Competition Act and the Credit Card Competition Act would benefit consumers by allowing greater competition in the payment card network space.

Opponents, led by the financial services industry, say expecting any savings for consumers is unrealistic and that the changes would make it more difficult for issuers to fund rewards programs and for smaller issuers to offer credit cards at all.

This legislative tug-of-war has been going on for years, and whether these changes finally make it through either chamber, much less to the president’s desk, is an open question.

The bottom line about these possible changes is that credit unions and banks need to prepare for potential revenue loss by diversifying further with other fee-based services, especially those that may be less volatile in such a shifting legislative and regulatory landscape.

Diversify non-interest income with estate planning

Now is the time to consider offering digital estate planning documents through a turnkey platform for consumers’ holistic financial well-being, as well as your bank or credit union’s revenue diversification. It’s a win-win strategy for serving an aging population: Families get the peace of mind that comes with legally valid estate documents from a trusted provider, while the provider benefits from the recurring fee income and deeper customer and member engagement and loyalty.

Further, that demonstrated commitment to your customers’ financial well-being also opens the door for successfully offering asset protection, wealth management and other personalized, value-added solutions.

An ideal way to begin is with a white-label digital platform that meets the expectations of your most tech-savvy consumers without the integration and maintenance challenges of doing such work in-house. OneDigitalTrust’s platform also integrates directly into a financial institution’s digital banking platform, making access and usage even more seamless and easy for consumers.

The coming year could be a pivotal juncture for banks and credit unions regarding overdrafts, NSF fees and interchange income. Deploying seamlessly integrated digital will and trust services is a wise investment your institution can make in the growth and financial well-being of your business and, as crucially, that of the families and individuals you serve.

170M Americans need an estate plan. OneDigitalTrust offers a white-label, turnkey estate planning platform with pricing options tailored to the needs of individual credit unions, banks and financial advisors.

Contact us today to learn more!

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Estate Planning Finds Purpose-Driven Entrepreneurship in Rocky Mehta

Sadly, most Americans have not done their estate planning or have let it get out of date.

That is part of the impetus for CEO Sonny Kapoor and co-founder Rocky Mehta to found OneDigitalTrust, a pioneering digital estate planning service, to help spare families during their darkest time, the complex and costly work of dealing with the estate of a loved one who died without a legally valid estate plan in place.

Recognizing an untapped opportunity to address the needs of the underserved and mass affluent, Kapoor and Mehta determined to follow their personal mission to build a platform that stands out in the competitive landscape by solving real-world problems.

Mehta sat down with co-founder of The Credit Union Connection, Sarah Snell Cooke, to share insights into the company’s mission and B2B model to help them reach more people quickly.

Sarah Snell Cooke: What’s OneDigitalTrust’s founding story – where did you get the idea for this company?

Rocky Mehta: OneDigitalTrust’s founding story has been the culmination of two things: Our CEO Sonny Kapoor and I have been in the financial services consulting space for most of our careers, and we saw this as an untapped opportunity for a digital estate planning service to meet the needs of the underserved and mass affluent.

Second, my co-founder and I have first-hand experience with family members with special needs, and we’ve seen a massive uptick in younger generations needing extra support. We felt we could make a difference by helping Americans afford to protect their families and legacies with our offering.

SSC: What problem are you trying to solve?

RM: All Americans should have their end-of-life affairs in order. No one knows when the worst could happen to us, but death and taxes are unavoidable. For whatever reason – putting off a morbid necessity or thinking you don’t have enough assets to worry about or trying to avoid the high cost of an attorney to create an estate plan, Americans don’t plan their estates.

Depending on who does the survey, an astounding 65% to 70% of Americans don’t have estate plans in place, or if they do, it needs to be updated. Both scenarios can lead to stressful and expensive work thrust upon their survivors. That’s the problem we’re solving!

SSC: Tell me a bit about your background.

RM: I come from a technical engineering and computer science background, and I went to business school afterward, which allowed me to serve as a liaison between technology and business. That helps me work with all of our teams from technology, legal, operations and sales & marketing to enable us to run a successful business to serve our clients and, in turn, their members or customers.

SSC: How are you planning to reach all Americans?

RM: I mentioned our mission is to support Americans to protect their lives and legacies, but it can be incredibly difficult to reach each of them individually. This problem has proven rather obstinate as the needle has barely moved over the last decade, which is why we believe that delivering estate planning through institutions (versus the status quo) will be the turning point when this needle moves. From the start, we knew we needed to work with other trusted businesses to enhance their services to their customers and members. Our partners are in the financial wellness field and include credit unions, banks, financial advisors, insurance companies, and employee benefits providers. This business model helps us to reach everyone faster and ensure they complete this vital task to protect their legacies and not leave a mess behind for their heirs to resolve. That can be very painful and expensive, as we all know from celebrities who’ve passed on without proper estate planning, including the King of Pop, Michael Jackson, and billionaire entrepreneur Howard Hughes.

SSC: How are you different from your competitors?

RM: The good news is that there is competition, and in the last two years even more competitors have entered the business. That means more people recognize that not having an estate plan is a massive problem that must be solved.

There is room for several players in this emerging market to help solve this brewing crisis across America in their own ways.

We have many unique advantages. We are an enterprise-level solution, and we partner with institutions to provide them the flexibility to configure, brand and price the value-proposition as they see fit to best serve their mission, target audience of ideal members and customers, and style of how they want to serve. With 170M Americans lacking an estate plan, OneDigitalTrust offers a white-label, turnkey estate planning platform with wholesale pricing options tailored to the needs of individual credit unions, banks, financial advisors, insurance agencies and HR benefits companies.

The real-time analytics capabilities offer our partners insights to better understand customer needs and identify opportunities to cross-sell and upsell. OneDigitalTrust provides financial services providers and financial institutions measurable opportunities to better support and understand their customers and members’ needs. I could go on and on with the capabilities and benefits of our platform, such as the plain-language documents, affordability, and extreme value. Still, the best way to understand our platform is to request a demo to show how OneDigitalTrust can best help!

OneDigitalTrust fulfills a burgeoning need to ensure more Americans complete their estate planning and keep it updated. We will further document estate planning need-to-know information, OneDigitalTrust, and the founders’ personal mission and entrepreneurial journey, so please be sure to sign up for our newsletter in the footer of this page and follow us on LinkedIn!

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Why is it important for credit unions to ensure members have a will or trust?

A death in the family ushers in a time that can be fraught with trauma and confusion. Questions around how to distribute that loved one’s assets via a will or trust, and who’s in charge of doing that, can be a particularly volatile part of the problem, even with modest estates.

Credit unions have always specialized in serving everyday people, and they can play a unique role in helping their members by making it easy for them to create estate planning documents, such as wills and trusts.

While there are some key differences, wills and trusts achieve the same end: They ensure the deceased person’s belongings, financial assets and real property are distributed according to their wishes. Without that, a person has died ‘intestate’ and state laws on ‘intestacy’ kick in, and that means leaving those crucial decisions up to probate courts and wrapped in red tape.

Wills are usually the first choice to consider for estate planning, and while they typically must go through probate, a concise, legally created will generally makes that a simple process. More complex situations, such as blended families, special-needs dependents and business assets might benefit even further from a clearly outlined trust.

Estimates are that about two-thirds of Americans don’t have a will or trust in place. Helping to ensure families address this critical aspect of financial planning in advance is yet another way your credit union can promote members’ financial well-being.

A natural next step in member service

Credit unions were established for people who otherwise could not obtain credit from banks to pool their assets and offer loans to each other. In recent decades, credit unions have greatly expanded their range of services and their commitment to providing complete financial care for members’ holistic financial wellness.

Indeed, your credit union may offer financial education materials already to improve members’ money management. Adding estate planning into the mix is a natural next step. A surprising number of adults do not have these end-of-life documents in place and education is a huge part of moving the needle in the right direction.

Encouraging members to outline an estate plan can prevent your staff from being caught in the middle of a traumatic financial and familial nightmare after the death of a member without proper documentation.

Instead of acting as a neutral third party trying to sort out a messy situation around account funds and asset distribution, you can point grieving families to the member’s documented wishes. This allows you to avoid emotionally charged conflict during an already difficult time.

A digital solution checks all the boxes for this generation and the next

Millennials are now the largest generation, they’re also often homeowners and parents at the stage when estate planning becomes particularly crucial to ensure proper distribution of assets and care for minor children should the unexpected befall them. It should be part of their overall financial awareness and action. And, as the generation who hit this stage of life during a global pandemic, it’s likely top of mind for them, too.

Additionally, your credit union can become an integral part of the “great wealth transfer.” What is that? It’s the $72 trillion in wealth currently held by baby boomers, much of which will be inherited by their millennial children. There’s ample opportunity for your credit union to provide a valuable service to these members, as well as be compensated for it in a way that is not interest-rate sensitive: non-interest income.

Millennials are also the first wave of members who expect to accomplish most everything digitally first. Providing a secure way to create and manage wills, trusts and similar documents through your credit union’s digital banking provides a new level of service to them and stickiness for you.

With a white-label digital solution fully integrated into your existing platforms, you can take credit for providing an innovative service that members will appreciate through one of the interfaces they already use and trust – your digital banking. Keep pace with the technological expectations of your younger members while building loyalty!

Delivering value while promoting responsible planning demonstrates your commitment to your members’ overall financial well-being. Digital estate planning checks all the boxes for why credit unions exist and how they can best serve member needs today. OneDigitalTrust delivers white-label, turnkey estate planning capabilities for legally valid documents in all 50 states, plus DC, with the highest data security and enterprise scalability. Is your credit union ready to take the next step in holistic member well-being?

170M Americans need an estate plan. OneDigitalTrust offers a white-label, turnkey estate planning platform with pricing options tailored to the needs of individual credit unions and financial advisors.

Contact us today to learn more!

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Credit Unions Have Education and Opportunity Around Estate Planning

Death and taxes are two of life’s inevitabilities for credit union members and everybody else. But being prepared is optional, and that means opportunity for member-owned financial cooperatives to help make a difference when it comes to members’ estate planning.

A recent survey of more than 2,400 American adults conducted by YouGov for Caring.com found that only 34% had estate documents in place. The same survey found that people ages 18 to 34 are now 63% more likely to have an estate plan than they were in 2020. That points to growing interest from a sweet spot for growing engagement: the younger set.

As not-for-profit financial institutions whose core principles focus on financial wellness and opportunity, credit unions can build business and deepen relationships with all generations by including estate planning in your lineup of products and services.

Where there’s a will, there’s a way. Even if it’s a trust.

Wills and trusts have the same goal – distribution of the deceased’s assets (investments, savings, property and possessions) per their wishes legally and efficiently. But there are some key differences to note.

A will is a legal document that names an executor to oversee the liquidation of the estate and lays out how to distribute the assets among family, friends, charitable causes, etc., as well as such matters as naming a guardian for minor children.

Further, a will only takes effect after death, and in most cases a probate court must validate the document before the assets can be distributed. This can be a very lengthy and stressful process for your members if they have not planned properly.

Trusts, meanwhile, are also legal estate plans but with some significant differences. For one, people can serve as their own trustees while they are still live. That’s often the case with what’s probably the most common type of trust: living, or revocable, trusts. They are what they sound like: You can revoke and alter them to reflect your changing wishes and feelings as time goes on and circumstances change.

You also can use the assets placed into the living trust any way you want while you’re still alive and in charge, as well as name in advance who manages your financial affairs if you become incapacitated before death.

A will is typically simpler and less expensive than a trust, but the latter can provide faster distribution of assets and greater privacy. Trusts don’t go through probate. Probated documents, including wills, are typically public information.

Education and opportunity for your credit union and your members.

As a trusted financial partner, your credit union can play a vital role in encouraging and facilitating effective estate planning for your members. Helping them understand the importance of having a plan in the first place, providing a clear view of their options, and then helping make it happen are all crucial inflection points in which credit unions can play a role for their members.

Of course, you don’t have to go it alone. Consider integrating a robust, comprehensive estate planning platform into your shop’s digital financial planning and wellness offerings or provide it as a stand-alone service.

The younger generation of members and potential members are already showing a growing interest in estate planning and they’re also digital natives, who will expect to do as much as they can on their own and online.

The older crowd, too, are used to doing more and more online since COVID and increasingly open to using such a digital platform to create and maintain legally valid wills and trusts.

The benefits include:

  • Peace of mind for members: Providing tools for legacy planning gives your members peace of mind knowing their heirs and chosen causes will be gifted as the member chooses.
  • Enhanced member loyalty: By helping members secure their financial future, credit unions foster deeper, stickier relationships and long-term trust.
  • New revenue streams: As credit unions move away from overdraft and other fees, estate planning represents an opportunity to replace other declining non-interest income.
  • Increased digital engagement: Integrating estate planning services into your digital platforms can boost mobile app engagement and provide lead generation among high-net-worth members for your credit union’s wealth managers.

Choosing between a will and a trust is just the beginning. By actively educating members and empowering them to make wise choices while taking advantage of digital services, credit unions boost their own bottom line, deepen member relationships and trust, and, as importantly, better empower their members to build a secure and well-managed legacy.

All these things matter to today’s forward-looking credit union.

170M Americans need an estate plan. OneDigitalTrust offers a white-label, turnkey estate planning platform with pricing options tailored to the needs of individual credit unions and financial advisors.

Contact us today to learn more!