Planning for the Next Generation: Trusts, Tax Services, Financial Planning, and AI

 

Legacy is more than what you leave behind — it is the foundation you build today to empower the generations that follow. Planning for the next generation requires a big picture approach that adopts traditional tools - like trust and tax services - with newer modern innovations - like financial planning and artificial intelligence (AI). Even though circumstances may change generation to generation, these four pillars, strategically merged with traditional and innovative concepts, will be the key to long-term wealth preservation, adaptation, and intergenerational success.

Trusts: Building a Legacy

A well-planned transfer of assets can ensure your wealth becomes a lasting foundation for the next generation to build on, with purpose and clarity. Trusts are a vital option when it comes to intergenerational wealth transfer. For example, Dynasty Trusts allow families to pass their wealth across generations while minimizing estate and generation-skipping taxes.

The unique capabilities of these trusts are extremely beneficial in preserving family businesses or real estate holdings due to the fact they provide clear guidelines for ownership transitions. However, a major consideration when establishing a Dynasty Trust is where the trust has situs and who serves as trustee.

As a corporate trustee, Allen Trust Company holds situs in Oregon, Washington, and – most advantageous for Dynasty trusts – Alaska. It is important to speak with an estate planning professional about your specific situation when taking trusts into consideration.

Tax Services: Strategic Optimization

Recognizing tax planning as a fundamental pillar of next-generation financial strategy is crucial, as improper planning can lead to tax implications that hinder or diminish financial growth. At Allen Trust Company we help clients navigate the complex tax regulations and maximize wealth preservation. In short, the main idea of tax services is to reduce an individual's taxable income by investing their money into assets that can help set up long-term financial stability. Tax services aid in preserving wealth and working with a professional to review your assets is necessary so future generations will have assets to look forward to.

Financial Planning: Looking to the Future

Financial planning for the next generation is incredibly important. They have several new challenges to address such as rising costs of living, student debt, and limited affordable housing. Due to these challenges that younger individuals face, adopting a personalized financial plan can help individuals build financial independence through passive income streams, trust services, and long-term investing.

Younger generations need to understand that time is on their side, and taking advantage of it is in their best interest.

For example, by investing $200 a month with an estimated 8% return starting at the age of 18; one would have roughly $1,200,000 when they plan to retire at 65.

That would be $10 a day or $50 a week. That number can be even greater as careers progress – when one can allocate more each month.


Additionally, digital tools like Grok & ChatGPT can aid in generating financial goals and plans that map out what is needed to start their financial planning journey. It’s recommended to have regular check-ins on financial performance and consistent communication with a financial planner or wealth advisor to ensure future financial stability.

AI Integration: Transforming Wealth Management

Artificial intelligence is a rapidly evolving tool that has great potential as a starting point for those looking to explore financial planning or investment options. AI is still very new and barebones; however, it’s a tool that can aid in one’s long-term wealth management. AI can support multigenerational planning by identifying patterns in both financial behavior and estate structures that can impact future generations. Examples of this include evaluating portfolio performance. However, AI can be incorrect so consulting a professional is still recommended. Read more about how AI may be transforming financial decisions here.

Conclusion

Planning for the next generation requires a balanced approach that combines traditional tools like trusts and tax services while integrating more modern tools such as financial planning and AI. Leveraging these resources strategically, and alongside a trusted financial advisor, can aid families in preserving wealth, and creating adaptability for future generations in an ever-evolving world.

Sources:

The Case for Establishing a Dynasty Trust | Charles Schwab

Current AI tools at the intersection of wealth and tax | Financial Planning

How AI May Be Transforming Financial Decisions — Allen Trust Company

 

Disclosure: The information provided in this writing is for general informational purposes only and does not constitute financial advice from Allen Trust Company and Allen Capital Management. Readers are encouraged to consult with a qualified financial advisor to assess their individual circumstances and make informed decisions based on their specific situation.

 
Keyshaun George