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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!