US Trust, part of Bank of America, has unveiled an integrated offering for the "modern wealthy American family" that addresses the complex and evolving needs of parents, children and extended family members.

US Trust, part of Bank of America, has unveiled an integrated offering for the "modern wealthy American family" that addresses the complex and evolving needs of parents, children and extended family members.

Family Wealth Services aggregates investment, banking, wealth transfer and legacy planning capabilities, providing strategies that incorporate generational differences, family diversity, emerging risks to financial security and overall family goals and values.

“Today’s families are complex, and they come in all shapes and sizes, with emotional, lifestyle and financial issues that are often closely intertwined,” said Keith Banks, president of US Trust. “We recognize that the individual financial and planning goals of our clients are part of a bigger, multi-dimensional family dynamic.”

The main elements of Family Wealth Services include:

- Financial education for children and wealth management across multiple generations;

- Dealing with the specialized needs of elderly family members;

- Customized wealth plans focusing on the distinct needs of women - including those who are single, married, widowed and divorced;

- Wealth planning for lesbian, gay, bi-sexual and transgendered domestic partners;

- Creating a multi-generational legacy, and

- Administrative support for family members and other individuals serving as a trustee or executor.

Next gen financial education

The "empowerment program" provides knowledge and tools related to an array of financial topics, with the aim of helping young adults in their twenties and thirties make informed financial decisions.

Over a third (37 per cent) of wealthy parents “strongly agree” that their children would benefit from discussions with a financial professional, the firm's research shows. This is an unsurprising finding given that 61 per cent of wealthy parents are not fully confident in their children’s ability to manage any financial inheritance left to them, according to US Trust's Insights on Wealth and Worth survey.

Furthermore, only 37 per cent of wealthy parents have fully disclosed their wealth to their children, while 51 per cent have revealed “only a little” about their financial status, the survey found. “The lack of discussion may be a reflection of the concerns many parents have talking about wealth with anyone, including their children,” US Trust said.

A lack of disclosure around wealth is often a main concern of younger generations, Jill Shipley, head of next gen education at GenSpring Family Offices, recently told this publication, often leading to problems in communication.

Eldercare planning

Another prong of the program is planning for the challenges associated with aging. These are complex and require an understanding of diverse options for living arrangements, healthcare, financial planning and estate planning, the firm said. However, many individuals do not have a financial plan accounting for the care of parents, other aging relatives, or indeed their own long-term needs. 

US Trust's eldercare program offers organizational services helping families assemble important financial, legal and medical information - including paper files, electronic records and digital passwords - using a checklist and personal inventory workbook.

The program takes into account the costs associ­ated with health and mobility, retirement asset planning, nursing homes, assisted living and home care and overall financial well-being.

While US Trust has offered eldercare services for a while now - it formally launched the program in May 2012 - the new offering draws a number of services together at the firm.

Women and LGBT domestic partners

Addressing women's financial concerns specifically is another facet of Family Wealth Services. Women “acquire their wealth in different ways,” US Trust said. Many create it themselves; others inherit it from a spouse or parent, and some receive it in a divorce settlement. They also tend to live longer, are more likely to be primary care givers and are more active in philanthropy, the firm believes.

Family Wealth Services aims to address challenges such as life transitions, including divorce or death of a spouse, retirement, care for aging relatives, philanthropic planning and business ownership succession planning.

Meanwhile, domestic LGBT (lesbian, gay, bisexual and transgender) partners “do not typically enjoy the same automatic legal rights and benefits as opposite-sex married couples,” US Trust said. Developing and implementing a strategy that considers the evolution in federal, state and local laws is therefore crucial in helping this segment pursue critical wealth management and legacy goals, the firm added. Related issues and concerns include estate and gift tax planning, homestead rights, guardianship rights and asset succession.

Individual trustees and philanthropy

Serving as a trustee involves performing a variety of tasks and assuming a “great deal” of responsibility and exposure to financial liability if mistakes are made, the firm said. Capabilities as an agent for a trustee might include investment management, principal and income accounting, preparation of required reports, managing distributions and taxes. In these respects, US Trust can act as an agent for individuals serving as executors and personal representatives, overseeing the complexities involved in settling estates.

Another fundamental aspect of Family Wealth Services concerns working with families to indentify common goals, develop mission statements and create philanthropic strategies that reflect the interests of individual family members. According to the aforementioned survey, creating or passing on a tradition of philanthropic giving to the next generation is perceived as a responsibility among many wealthy families.

A recent study - carried out by the National Center For Family Philanthropy in collaboration with Family Office Exchange and Threshold Group - revealed that a growing number of wealthy families are turning to family offices as a way of managing their philanthropic giving - a move with numerous benefits, but not without challenges. The findings closely followed those of Bank of America's 2012 Study of High Net Worth Philanthropy, which found that average giving as a percentage of high net worth household income "held steady" at about 9 per cent between 2009 and 2011, while three-quarters of wealthy donors expect to give "as much or more" over the next three to five years (view here).