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Wealth Planning

Your children, their trusts. How to bridge generational gaps

Three trends are driving Millennials and Gen Z: a passion for philanthropy, entrepreneurial spirit and later-in-life marriage

You’re a parent. Of course you want your children to thrive, to be as happy and successful as they can be. Along with parental love and practical advice, you may want to transfer some of your wealth to your children. To transfer wealth in the most protective and tax-efficient way possible, consider using a trust.

The structure of your trust should reflect both your own and your children’s financial, professional and personal goals. But different generations have different perspectives. For example, surveys show that younger Americans tend to have a keener sensitivity to wealth inequality than their parents and grandparents. In other words, multigenerational understanding and dialogue are crucial to prudent trust and estate planning. To set up the most effective trust structure and strategy, you’ll want to understand the worldview of your children’s generation, whether Millennials (born 1981–1996) or Gen Z (born 1997–2012), and your own children’s passions and goals.


Philanthropic passion

Millennials and Gen Z are more likely to donate to charity than any other generation.1 The pandemic seems to have intensified that commitment. According to one recent survey, 60% of Millennials voiced an increased interest in philanthropy due to COVID-19.2 Sometimes the focus is domestic, while at other times Millennials pursue international giving objectives.

How can a trust support your children’s philanthropic goals?

Many times, trust documents are written to distribute funds to beneficiaries according to the ascertainable standard (to help pay for their health, education, maintenance and support). However, this standard provision wouldn’t allow your children to withdraw trust funds to support their philanthropic endeavors. An alternative structure, including a charitable beneficiary alongside your children, can give a trustee the power to distribute trust assets to charity.

Instead of trying to finesse the language of a trust agreement, you may establish and fund either a private foundation or donor-advised fund account. One important benefit: Children can sit on the board of the foundation and influence its donation strategy. A private foundation or donor-advised fund account can exist in perpetuity, and help you to instill and inspire philanthropic values for many generations.


Entrepreneurial spirit

Americans have long been known for an entrepreneurial spirit, but it may be especially pronounced among Millennials. One survey found that 66% of Millennials aspire to start their own businesses, and 61% of them feel they would have more job security by owning their own companies.3

Here are a few ways you might help your children make that dream come true:

  • Boost your children’s business engagement and sense of entrepreneurship by setting up a trust. For example, you might transfer your privately held business assets to your children in the trust. How might that spark an entrepreneurial spirit? Just knowing a trust is there might give your children the peace of mind to try something entrepreneurial, taking on the risks of starting a business that others would find daunting. But it is critical to choose the right trustee to provide guidance and expertise.
  • Put seed money for your children’s businesses in a trust. Doing so would provide a resource to fund your children’s entrepreneurial ideas, while providing guardrails and oversight to protect the principal of the trust. Ensure that you work closely with an estate planning lawyer as well as a responsible and knowledgeable trustee so the terms of that trust’s distribution or loans from the trust work well for the children’s goals. Specifically, a trust can be set up to allow the trustee to support reasonable entrepreneurial initiatives, if your children choose to pursue them.


Later-in-life marriage

As many aspiring grandparents know, children of Baby Boomers are getting married later in life. In fact, Pew Research found that Millennials are getting married on average four years later in life than their counterparts in 1987.4

Marrying later means that many members of the Millennial and Gen Z generations may have accrued a substantial pool of assets by the time they do tie the knot. That may strengthen the argument for a pre-nuptial agreement.

If you do not want to broach this sensitive subject with your children, there are other ways to ensure that the wealth you intend for your children cannot be claimed by a potential ex-spouse:

  • Establish a separate property trust for your children. This would help distinguish marital property from separate property in the trust (essentially property acquired before marriage or through inheritance or a gift). The assets in the trust will most likely never be considered marital property.
  • Consider creating a dynasty trust. Such a trust would help transfer your assets from generation to generation without incurring transfer taxes, while providing asset protection in perpetuity. The terms of the trust may or may not include spouses of the family members or the option for a beneficiary to appoint trust assets to a spouse.

You want your wealth to best support your children’s ambitions and aspirations—and your trust should be structured accordingly. When establishing any type of trust structure, we recommend you involve the next generation early on—together, you’re building a family legacy.

Your J.P. Morgan team can work closely with you and your attorney to help you make sure your trust works well for you and your children, and that it is well positioned to meet the challenges of the future. We administer nearly 20,000 trusts globally, handling virtually every type of family, situation and asset type.5

Speak to your J.P. Morgan team to learn more about trusts and other next-generation wealth strategies.



1.  WNPR, Millennials and Charitable Giving: A New Approach to Philanthropy, December 2019.
2.  UBS, UBS Investor Watch: Wealthy investors see lasting life changes after COVID-19, July 2020.
3.  Inc., Are Millennials the New Entrepreneurs?, November 2018.
4.  Pew Research, As Millennials Near 40, They’re Approaching Family Life Differently Than Previous Generations, May 2020.
5.  As of December 2020.




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