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CU System
Filene report addresses CU implications of living trusts
MADISON, Wis. (6/22/10)--Credit unions looking to capitalize on trends regarding living trusts should focus marketing on high-income and high-asset members older than 50, according to a new study from the Filene Research Institute. “Credit Union Implications of Living Trusts” offers a look at trends in trust creation and detailed breakdowns of who is most likely to open trust accounts. Credit unions are advised to consider the needs of women in establishing trusts and target members with significant assets in defined contribution plans. In 1980, 84% of workers at medium to large companies were eligible for defined benefit plans from their employers, but by 2008, just one-third of such workers had access to the plans. As access to the plans disappear, trust accounts are being replaced by defined contribution plans--like 401(k) and individual retirement accounts, Filene said. The study found that about one in 10 U.S. households with an adult at least 50 years old has a living trust. The average trust holder is 72 years old with 14 years of formal education, $1 million in nonhousing wealth and three children. As more retirees receive retirement benefits as lump-sum rather than annuity payments, more have an opportunity to set up living trusts--through credit unions. “As financial partners of choice for many of today’s retiring workers, credit unions should take a hard look at offering trust services, which can keep valuable relationships and valuable assets at the credit union,” Filene added. The study was authored by Jinkook Lee, Filene research fellow and senior economist at RAND Corp.; Arie Kapteyn, senior economist at RAND; Jung-Seung Yang, a PhD candidate in economics at Seoul National University in South Korea; and Christopher Sharon, a doctoral fellow at the Pardee RAND Graduate School and assistant policy analyst for the RAND Corp.
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