Credit Unions Have Education and Opportunity Around Estate Planning

Credit Unions can educate members about wills and trusts and then offer them with OneDigitalTrust

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!

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