2019 Continuing Education Booklet

PRESENTATION TITLE (EDIT IN SLIDE M ASTER)

Wealth Management for a Brave New World:

1

It’s All in the Family, What’s a Family?

October 8, 2019

CENTRAL NEW YORK COM M UNITY FOUNDATION

Blended, Multi-Generational Family

//

Wife 1

Son

Son

Husband

Daughter

Wife II

Daughter

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Son

2

Blended, Multi-Generational Family

Wife I Traditionalist

Son Gen X

//

Son Gen X

Husband Traditionalist

Daughter Gen X

Wife II Boomer

Daughter Millennial

Son Millennial

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3

Generalizations About Generations

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4

Generational Assignments And Attributes APPROXIMATE BIRTH YEARS

Lost Generation

1883 - 1900

G. I. Generation

1900 - 1926

Traditionalists Silent Generation

1927 - 1945

Boomer Generation

1946- 1964

Generation X

1965 - 1981

Millennial Generation

1982 - 2002

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5

Traditionalists - The Adaptive Generation

Defining Question: Where Were You on D-Day?

Technology Question: When Did Your Family Get a Radio?

Grew Up During Depression, Many in Multi-Generational Households

Parental Model – Breadwinner & Bread Baker

Children Obey Adults

Personal Responsibility and SelfSacrifice Undergird Modesty

Character Traits:

→

Dutiful

→

Frugal

→

Committed (Marriage, Employment)

→

Respectful (Authority, Institutions, Government) Accelerated Adulthood

→

→

Strong Work Ethic

→

Delayed Gratification

→

Decision Making: Command and Control

→

89% Religiously Affiliated

→

6% Have Tattoos

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6

Boomers - The Idealistic Generation

Defining Question: Where Were You When President Kennedy Was Shot?

Technology Question: When Did Your Family Get Its First Television?

Grew Up in Two-Generation Households (for first time)

Parental Model – Breadwinner & Bread Server

Children Accommodated Adults

Competence and Expertise Before Self-Esteem

Character Traits:

→

Optimistic – Hard Work & Loyalty Lead to Personal Gratification

→

Competitive (We Choose Sides)

→

Rejected then Embraced Authority

→

Adulthood Leads to the American Dream

→

Live to Work

→

Decision Making: Consensus

→

83% Religiously Affiliated

→

15% Have Tattoos

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7

Gen X - The Reactive Generation

Defining Question: How Old Were You When Your Parents Got Divorced?

Technology Question: When Did Your Family Get Its First Computer?

More Likely to Grow Up in a Divorced Household

Parental Model – Breadwinner & Breadwinner (Latch-Key Kids)

Children Teach Adults

Self-Reliance and Validation Lead to Self-Esteem (and Entitlement)

Character Traits:

→

Skeptical (Marriage, Corporations, Government)

→

Work/Life Balance is Very Important

→

Private

→

→

Suspicious of Authority

Decision Making: Pragmatic, Independent, Impatient

→

Adulthood Will be Less Prosperous than Parents’

→

77% Religiously Affiliated

→

32% Have Tattoos

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8

Millennials - The Civic Generation

Defining Question: Where Were You on 9/11?

Technology Question: How Old Were You When You Got Your First iPhone?

Grew Up in Diverse Households

Parental Model – Breadwinner & Breadwinner

Adults Accommodate and Consult Children

Self-Esteem Precedes Competence

→

Optimistic

→

Collaborative, Tolerant

→

Technologically Savvy, Multitasking

→

Socially Responsible, MultiCultural

→

Delayed Adulthood

Character Traits:

→

Work to Live…But Seek Responsibility and Recognition

→

Decision Making: NetEducated, Networked

→

Largest and Most Racially Diverse U.S. Generation

→

65% Religiously Affiliated

→

38% Have Tattoos

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9

U.S. Life Expectancy 1900 - 2018

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10

Family Demographics

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11

Trends In The Prevalence Of Households By Type 0.9 0.8 0.7 0.6

Married Households

0.5

Non-Family Households

0.4

Other Family Households

0.3 0.2 0.1

0 1940

1947

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

Source: U. S. Census Bureau, Decennial Census, 1960, and Current Population Survey, Annual Social and Economic Supplements, 1968 to 2015

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12

Unmarried Couples of the Opposite Sex 9 8

Couples – In Millions

7 6 5

Without Children

4

With Children 3 2 1 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: U.S. Census Bureau, Current Population Survey, Annual Social And Economic Supplements 1996-2015.

NOTE: Prior to 2007, unmarried partners were counted only if one of the partners was the householder.

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13

Median Age at First Marriage: 1890 to Present Age in Years

35 30 25

Men

Women

20 15

Men (Years) Women (Years)

10 5 0

Source: U. S. Census Bureau, Decennial Censuses, 1890 to 1940, and Current Population Survey, Annual Social and Economic Supplements, 1947 to 2015.

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14

Inter-marriage Rates Percent of Marriages Involving Spouses of a different race/ethnicity from each other

18.00% 16.00% 14.00%

12.00% 10.00% 8.00% 6.00%

Newly Married Currently Married

4.00% 2.00% 0.00%

Source: Pew Research Center analysis of 2008-2013 American Community Survey and 1980-2000 census data (IPUMS).

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15

Changing Marital Paradigm

Old Marital Paradigm: Marriage = Cornerstone**

Courtship

Marriage

Cohabitation

Children

Financial Security

Financial Security

Children

Marriage

New Marital Paradigm: Marriage = Capstone**

Courtship

Cohabitation

*40% of children are born outside marriage. National Vital Statistics Report 2012 Martin, J.A., Hamilton, D.E. Osterman, M.J.K., Curtin, S.C. & Mathews, T.J. (2013) **”Knot Yet: The Benefits and Costs of Delayed Marriage in America” © 2013 The National Marriage Project at The University of Virginia

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16

Changing Views of Marriage The Freedom to marry has long been recognized as one of the vital rights essential to the orderly pursuit of happiness by free men. Marriage is one of the “basic civil rights of man,” fundamental to our very existence and survival…1

Rising from the most basic human needs, marriage is essential to our most profound hopes and aspirations. The centrality of marriage to the human condition makes it unsurprising that the institution as existed for millennia and a cross civilizations. Since the dawn of history, marriage has transformed strangers into relatives, binding families and societies together.2

Marriage as a family form is not more important or valuable than other forms of family, so the law should not give it more value.3

I suspect marriage as we have known it is not coming back.4

1.

2.

3.

4.

Loving v. Virginia, 388 U.S. 1, 12 (1967) Obergefell v. Hodges, 576 U.S. _______ (2015) Nancy Polikoff, Beyond (Straight and Gay) Marriage (2008) Isabell V. Sawhill, “Restoring Marriage will be Difficult,” Brookings Institution (2012)

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17

Federal Aspects of Marital Status* •

Taxation

•

Inheritance & Property Rights

•

Rules of Intestate Succession

•

Spousal Privilege in the Law of Evidence

•

Hospital Access

•

Medical Decision-Making Authority

•

Adoption Rights

•

The Rights and Benefits of Survivors

•

Birth and Death Certificates

•

Professional Ethics Rules

•

Campaign Finance Restrictions

•

Workers Compensation Benefits

•

Health Insurance

•

Child Custody, Support and, Visitation Rules

* Obergefell v. Hodges, 576 U.S. __________, 17 (2015)

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18

Changes in Family Structures

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19

Prototypical 1950’s American Family

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20

Costco

Love

Love in Bulk

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21

Costco

Love

Love in Bulk Met at Costco 1st Anniversary Date at Costco

“Kirkland Signature Brand Husband”

Costco Shirt Costco Wedding Cake

Costco Flowers Costco Wedding Rings

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22

The 50 Most Common Family Types in America →

Larger Circles: Adults

→

Smaller Circles: Children/Grandchildren

→

Dark Green Circles: Those in Household Nucleus

→

Light Green Circles: Family Members Outside the Nucleus

→

Grey Circles: Non-Relatives

“The demographic changes of the past century make it difficult to speak of an average American family. The composition of families varies greatly from household to household.” Troxel v. Troxel, 530 U.S. 57, 63 (2000)

“Most Common Family Types in America,” Nathan Yau, Flowingdata, July, 2016. American Community Survey 2010-2014, United States Census Bureau.

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23

Traditionalist Family

Husband

Wife

Son

Daughter

Grandchild

Grandchild

Grandchild

Daughter

Grandchild

Grandchild

Grandchild

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24

Boomer Family – Blended*

1st Wife

Husband

Wife

//

Daughter

Daughter

1st Husband

//

Daughter

Daughter

Son

One out of six American children live in a blended family. Pew Research Center: 10 Demographic Trends That Are Shaping the U. S. and the World 40% of American Adults have at least one step-relative in their family

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25

Gen X / Millennial Family

Female Partner

Female Partner

Second Parent* Adoption

Daughter

Son

* “The phrase ‘second-parent adoption’ refers to an independent adoption whereby a child born to [or legally adopted by] one partner is adopted by his or her non-biological or non-legal second parent, with the consent of the legal parent, and without changing the latter’s rights and responsibilities.” Sharon S. v. Superior Court, 73 P. 3d, 554, 558 (Cal. 2003)

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26

3 Parent Family

Husband

1st Marriage

Wife

x

DeFacto Parent 1

2nd Marriage

or

Wife

Step Parent Adoption 2

Child

1. A De Facto parent is “one who is not a child’s legal parent, but has been found by a court to have assumed on a daily basis, the role of parent, fulfilling both the child’s physical and psychological needs for care and affection, and has assumed that role for a substantial period of time.” California Rules of Court 5.502 (10) (2015)

2. See Between A.A. and B.B. and C.C., 2007 ONCA 2 (Can.) and LaChapelle v. Mitten, 607 N. W. 2d 151 (Minn. Ct. App. 2000) and Gelman, “What About Susan? Three’s Company, Not a Crowd: The Importance of Allowing Third Parent Adoptions When Both Legal Parents Consent,” 30 Wisconsin Journal of Law, Gender and Society 57(2015). northerntrust.com | © Northern Trust 2018

27

Co-Parenting Arrangement

Mother

Father

Non-Marital

Daughter

Shared Custody

Son

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28

Posthumous Reproduction

Husband (deceased)

Wife

Posthumous Child

Parentage, inheritance rights, intestate succession and eligibility for Social Security survivorship benefits have been addressed, respectively, by the Uniform Parentage Act §§ 204 and 707, the Restatement (Third) of Property: Wills and Other Donative Transfers § 14.8, The Uniform Probate Code § 2 - 104 and 2-120, (2012), and the U.S. Supreme Court in Astrue v. Capato 566 U. S. 132 (2012).

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29

Twibling Family* Egg Donor Gestational Surrogate

Embryo

Embryo

Husband

Husband

Son

Daughter

Gestational Surrogate

* Two Men Looking for Love, and for ‘Twiblings’ The New York Times, March 24, 2019

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30

A.R.T. Children – “Dibling” Relationships

Male Genetic Donor

Mother

Mother

Mother

Mother

Daughter

Son

Son

Daughter

Mother

Daughter

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Son

31

The Washington Post A Lack of Regulation has Created Enormous Genetic Families. Now They are Searching for One Other. (continued)

Ariana Eunjung Cha, September 12, 2018

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32

Artificial Reproductive Technology: Reproductive Variables (2018)

Father

Mother

Pregnancy

Conception

→

His sperm

→

Her egg

→

Mother’s womb

→

In Utero

→

Donor sperm

→

Donor Egg

→

Surrogate’s womb

→

Ex Utero

→

Fresh

→

Hybrid Egg*

→

Inter Vivos

→

Frozen

→

Fresh

→

Posthumous

→

Frozen

*Via Spindle Nuclear Transfer Technique

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33

Artificial Reproductive Technology I

U. S. Statistics* →

263,577 ART cycles in the U. S. in 2016 −

65, 996 live births

−

76, 930 infants

→

65,840 banking cycles in the U. S. in 2016 (preserving fresh non-donor eggs or embryos for futures use)

→

1,000,000 embryos in storage in (2015)

→

1.7% of infants born in U.S. annually conceived via ART

*Centers for Disease Control ART National Data 2015

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34

Composition of American Families* American Families

31% Households Without Children

-

35% Traditional - Heterosexual - Married - Children

Traditional

Modern Households Without Children

34% Modern Blended Multi-generational Same Sex Single Parent

*United States Census Bureau “America’s Families and Living Arrangements” (2013)

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35

Estate Planning & Trust Management For A Brave New World

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36

Demographic Changes: Strategic Issues

Changes in Generational Attributes

Evolution of Family Structures

Shifting Dynamics in Family Roles and Expectations

Dramatic Decline in Marriage

How is Charitable Giving Evolving?

How and to Whom will Financial Wealth be Allocated?

Are There Limits to Longevity?

Dramatic Increase in Life Expectancy How will Modern Families Collaborate and Make Decisions?

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37

Generational Attributes and Charitable Giving

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Evolving Generational Attributes

Traditionalists

Boomers

Gen Xers

Millennials

Adaptive

Idealistic

Reactive

Civic

Pragmatic

Optimistic

Skeptical

Tolerant

Respectful

Competitive

Private

Collaborative

Strong Work Ethic

Live to Work

Work/Life Balance

Work to Live

Paternalistic Decision Making

Consensus Decision Making

Pragmatic Decision Making

Networked-based Decision Making

Religious Affiliation 89%

Religious Affiliation 83%

Religious Affiliation 77%

Religious Affiliation 65%

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39

Charitable Giving Patterns by Generation* Traditionalists: 26% of total giving 88% contribute Average giving - $1,367 annually to 6.2 charities

Boomers: 43% of total giving 72% contribute Average giving - $1,212 annually to 4.5 charities

Generation X: 20% of total giving 59% contribute Average giving - $732 annually to 3.9 charities

Millennials: 11% of total giving 60% contribute Average giving - $481 annually to 3.3 charities *Blackbaud - The Next Generation of American Giving, 2013 northerntrust.com | Š Northern Trust 2018

40

U.S. Life Expectancy 1900 - 2018

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41

Boomers and Millennials: Challenging Interdependence

Boomers are Subsidizing Millennials’ Housing

Millennials will Subsidize Boomers’ Social Security

Because of Lower Birthrates Among Those in the Baby Boom Generation, the Resulting Decline in Available Family Caregivers May Lead to a Caregiving Perfect Storm Severely Straining Families and Public Programs as Dementia Cases Grow.*

Boomers will Consume More of Millennials’ Inheritances

Millennials Must Self-Fund Retirement, and will Inherit Less Financial Capital, More IRD

*Aging In the 21st Century: Challenges and Opportunities for Americans, 45 (2017)

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42

Women, Work, Marriage and Philanthropy

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Women, Work, Marriage, and Philanthropy Changes in Women’s Labor Force Participation in the 20th Century

90

Percent

80

77.1

76.3

70

76.2

63.3 59.8

60

51.2

50 40

1950 1998

43.9 39.1

37.9

34

33.9

30

27

20 9.7 8.6

10 0

16 and Older

16 to 24

25 to 34

35 to 44

45 to 54

55 to 64

65 and older

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44

Average Amounts Given by Young Single Men Across Two Generations Average Amount Given $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0

$492 $344

Pre-Boomers

Gen X/Millennials

Notes: Amounts are averaged over donors and non-donors. “Giving” is defined as donations to charitable organizations, and does not include giving to religious congregations. The two generations are defined as: (1) preBoomers ages 25-47 in the 1970s: and (2) GenXers/Millennials, ages 25-47 in the 2000s.

Women Give16, Women’s Philanthropy Institute, Indiana University Lilly Family School of Philanthropy. northerntrust.com | © Northern Trust 2018

45

Average Amounts Given by Young Single Women Across Two Generations Average Amount Given $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0

$216

Pre-Boomers

$244

Gen X/Millennials

Women Give18, Women’s Philanthropy Institute, Indiana University Lilly Family School of Philanthropy. northerntrust.com | Š Northern Trust 2018

46

Percentage of Adult Children Who Give, by Parents’ Giving

82.00% 80.50%

80.00% 78.00% 76.00% Parents Do Not Give

74.00%

Parents Give 72.00%

71.80%

70.00% 68.00% 66.00%

Women Give18, Women’s Philanthropy Institute, Indiana University Lilly Family School of Philanthropy. northerntrust.com | © Northern Trust 2018

47

Percentage of Adult Daughters and Sons Who Give, by Parents’ Giving and Parents’ Wealth Sons

Daughters

100.00%

100.00% 87.50%

90.00%

87.50% Parents' Wealth <$100,000

80.00%

70.90%

Parents' Wealth ³$100,000

70.00% 60.00%

90.00% 80.00%

60.00%

50.00%

50.00%

40.00%

40.00%

30.00%

30.00%

20.00%

20.00%

10.00%

10.00% Parents Do Not Give

Parents Give

Parents Do Not Give

Parents Give

74.40%

70.00%

57.90%

0.00%

92.40%

65.40% 55.20%

0.00% Parents Do Parents Give Parents Do Parents Give Not Give Not Give

Women Give18, Women’s Philanthropy Institute, Indiana University Lilly Family School of Philanthropy.

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48

Young Married Couples’ Charitable Decision Making Across Two Generations

Pre-Boomers

Gen X/Millennials 2%

14%

26.6% 73.4%

Men Only Women Influenced Other Cases

84%

Notes: Amounts are averaged over donors and non-donors. “Giving” is defined as donations to charitable organizations, and does not include giving to religious congregations. The two generations are defined as: (1) pre-Boomers ages 25-47 in the 1970s: and (2) GenXers/Millennials, ages 25-47 in the 2000s.

This figure describes decision making only for young married couples who gave “large amounts,” defined as $100 or more for preBoomers and $600 or more for GenX/Millennials.

Women Give16, Women’s Philanthropy Institute, Indiana University Lilly Family School of Philanthropy. northerntrust.com | © Northern Trust 2018

49

Level of Women’s Influence: Average Amounts Given by Young Married Couples Across Two Generations $2,500

$2,203

$2,000 $1,385

$1,500

$1,000

$1,269

$986

$500

$0 Women Influenced Pre-Boomers

Men Only

Gen X/Millennials

Notes: Amounts given to charitable organizations are averaged over the donors of large amounts.

Women Give16, Women’s Philanthropy Institute, Indiana University Lilly Family School of Philanthropy. northerntrust.com | © Northern Trust 2018

50

How and to Whom Will Financial Wealth be Allocated?

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The Health & Retirement Study

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52

The Health & Retirement Study*  Bi-annual survey of 20,000 Americans aged 50 and older

 Objectives:

♦ ♦ ♦ ♦ ♦

Explain the antecedents and consequences of retirement Examine the relationships among health, income, and wealth over time Examine life cycle patterns of wealth accumulation and consumption Monitor work disability Examine how the mix and distribution of economic, family, and program resources affect key outcomes, including retirement, “dissaving,” health declines, and institutionalization

*National Institute on Aging and University of Michigan Institute for Social Research

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53

Health & Retirement Study Themes* I

Intestacy:

→

42% of all Health & Retirement Study (HRS) respondents have no will

→

38% of deceased HRS respondents died intestate

→

49% of HRS respondents with stepchildren have no will

→

59% of HRS “no-contact” parents have no will (parent who has had no contact with at least one genetic child for at least one year)

→

62% of divorced HRS respondents have no will

*Drawn from Health & Retirement Study data and National Bureau of Economic Research Working Paper “Unequal Bequests,” M. Francesconi, R. Pollack, D. Tabasso. Working Paper 21692 (2015).

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54

Estate Planning – Essential Questions To Whom/To Which How Much → →

Is Enough Is Too Much

When → →

To Give To Discuss

In What Form → →

Outright or in Trust Trust Design and Attributes

Who Will Serve as our Surrogate → → →

For Health Care and Financial Decisions For Managing Our Assets To Care for Our Families

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55

Gratuitous Transfers: Freedom of Disposition Private Wealth

Private Gifts

Bequests

Private Interests

Philanthropic Gifts

Transfer Taxes

Public Interests

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56

Blended, Multi-Generational Family

//

Wife 1

Son Gen. X 44

Son Gen. X 42

Husband Traditionalist 72

Wife II Boomer 57

Daughter Gen. X

Daughter Millennial

Son Millennial

41

25

21

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57

Entertainment for Stepchildren

91S rn sxB ExL._SL1 500_ .jpg 1, 172 x1 ,500 pixels

2/10/18, 5:03 PM

DANNY DeVITO

BILLY CRYSTAL

NTAC:3NS-20

NTAC:3NS-20

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58

Blended, Multi-Generational Estate Plan

Wife II Boomer

Husband Traditionalist

Testamentary Wealth Transfer

Lifetime Wealth Transfer

Split Annual Exclusion Gifts - $30,000 x5

Rolling GRAT’s Remainders in Equal Shares to Children

QPRT for Vacation Compound

Son Gen X

Son Gen X

Unused Exemption Grandchildren’s Trust

Family Foundation

Daughter Gen X

Marital Trust

Endowment for Vacation Compound

Daughter Millennial

Son Millennial

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Wealth Transfer Planning for Contemporary Families PRIOR GENERATIONS Estate Planning

Mortality

Family Disclosure

CONTEMPORARY FAMILIES

Estate Planning Family Dialogue Spouses/Partners - Expectations - Expectancies - Goals

Parents/Partners and Children - Family Views - Expectations - Hopes/Fears

Plan Design and Implementation

Family Disclosure

Spouses/Partners and Children - Plan - Rationale - Role of Advisors - Concerns

northerntrust.com | Š Northern Trust 2018

60

Wealth Transfer Issues for Contemporary Families Wealth Sufficiency

How Much Wealth is Enough? How Much is too Much?

Generational Expectations About Financial Wealth and Estate Planning

Lifetime v. Testamentary Wealth Allocation

Viability of Life Estate with Remainder Construct

Utility and Shelf Life of Spray Trusts

Rewards and Risks of Shared Assets

Perpetual Trusts: Family Reproduction and Per Stirpital Allocation

Fiduciary Roles: Who Serves Whom and Why northerntrust.com | Š Northern Trust 2018

61

Traditional Estate Planning Paradigmâ&#x20AC;Ś.Recast

Tax Based Transfer Tax Centric

Goals Based Tax Efficient

Hierarchical Nuclear Family Oriented

Humanistic Sensitive to Family Structure

Culturally Homogeneous

Culturally Adaptable

Predominant Focus on Financial Wealth

Holistic Understanding of Family Wealth

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62

Longevity, Disability, Mortalityâ&#x20AC;Ś Immortality?

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63

Young Children and Older People as a Percentage of Global Population: 1950-2050 18.00% 16.00% 14.00% 12.00% 10.00%

AGE <5 AGE 65+

8.00% 6.00%

4.00% 2.00% 0.00%

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Source: United Nations. World Population Prospects: The 2010 Revision.

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64

The Growth of Numbers of People with Dementia in High-income Countries and Low and Middle-income Countries: 2010-2050

Number of People with Dementia (millions)

120 100 80 High Income Countries

60 40

Low and Middle Income Countries

20

0 2010

2020

2030

2040

2050

Source: Alzheimerâ&#x20AC;&#x2122;s Disease International. World Alzheimer Report 2010

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65

Who Should Bear the Greatest Responsibility for the Elderly?

Pakistan United States

2

77

16

46

20

South Korea

53

Japan

27

France

23

10

Nigeria Spain South Africa Kenya

12

38

13

33

39 13

38

11

36 36

5

38

32 40

13

22

11

23 25

59

22

Turkey

9

23

Egypt

9

22

Israel Russia

55 40

11

Italy

The Government

38

Argentina

China

Their Families

24

42

9

Themselves

42

41

8

Mexico

36 33

United Kingdom

Brazil

33

33

Germany

Indonesia

24

55 42 51

9

20

7

20

47 56

11

8

8

10

61 63

Source: Pew Research Center survey, March-April 2013, N-22,425 adults in 21 countries northerntrust.com | Š Northern Trust 2018

66

U.S. Fertility Rates

Number of Childbirths Per Woman 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Number of Childbirths Per Woman

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(Digital) Elder “Care”

“Grandma and Grandpa need - and deserve - an attentive, caring, interesting person with whom to interact. The only such person(s) who can be summoned into existence to meet this demand are manufactured software persons with robotic bodies, i.e., empathetic, autonomous robots with a physicality that mimics a flesh and blood person.”*

* Martine Rothblatt, Virtually Human, 67 (2014)

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The Risk of Disability

Planning For:

End-of-Life Issues

Closing the Gap Between Elder Intent and Outcomes • Living Circumstances • Medical Treatment • End-Stage Treatment

The Role of Advance Directives • Durable Powers of Attorney • Living Wills • Physician Orders for Life Sustaining Treatment (POLST’s)

The Risk of Family Conflict • Speculation (In the Absence of Advance Directives and Discussion) • Personal Convictions • Misinformation

The Importance and Challenges of Family Disclosure and Discussion • Increasing Cultural and Religious Diversity • Increasing Diversity of Family Structures

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Mortalityâ&#x20AC;ŚImmortality?

The days of our years are the threescore years and ten; and if by reason of strength they be fourscore years, yet is their strength labor and sorrow; for it is soon cut off and we fly away.

Psalm 90:10

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Mortalityâ&#x20AC;ŚImmortality?

Evangelists:

Transhumanists

Optimists:

Immortalists

Pessimists:

Cryopreservationists

Realists:

Biologists, Medical Doctors

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Transhumanism Immortality Bus

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Immortalists OBSERVATIONS “Clearly, it is possible, through technology, to make death optional.” Martine Rothblatt, Chairwoman, United Therapeutics “The proposition that we can live forever is obvious. It doesn’t violate the laws of physics, so we will achieve it.” Arram Sabeti, CEO Cater “I decided that I was just not going to die.” Dave Aspray, CEO, Bulletproof

OUTCOMES Biological Immortality (Joon Yun, Aubrey deGrey)

Digital Immortality (Ray Kurzweil, Martine Rothblatt)

ORGANIZATIONS National Academy of Medicine SENS Research Foundation Unity Biotechnology Google Calico * Quotations from “Silicon Valley’s Quest to Live Forever,” The New Yorker, April 3, 2017. northerntrust.com | © Northern Trust 2018

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Cryopreservationists CRYOPRESERVATION ORGANIZATIONS ALCOR LIFE EXTENSION FOUNDATION Not-for-Profit Founded 1972 155 Patients in Cryopreservation Whole Body Cryopreservation - $200,000

CRIONICS INSTITUTE Not-for-Profit Founded 1976 150 Patients in Cryostasis Whole Body Suspension - $28,000

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Cryopreservation/Revival Trusts PURPOSES FUNDING FOR CRYOPRESERVATION, STORAGE OF DIGITAL MIND IMAGES “During cryopreservation the Grantor will no longer be living, but the Grantor will nevertheless not be dead.”

DISTRIBUTIONS TO THE GRANTOR’S BIONIC ANALOG VERSION (“BAV”) “If multiple BAV’s of the grantor are restored, - Each is entitled to discretionary distributions - Each may live rent free in any trust property.”

TERMINATION UPON THE GRANTOR’S REVIVAL “Whether the grantor is revived in this world or another world.”

“Upon revival the Grantor will be considered a different legal person.”

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Immortality - Realists* “The maximum lifespan of humans is fixed and subject to natural constraints”

“We expect that the oldest person alive will be around 115 years for the foreseeable future.”

“The best hope for our species is not to extend life spans but to lengthen our years of healthy living.”

* Dong, Xiao, Ullholand, Brian and Vijg, Jan, “Evidence for a Limit to Human Lifespan,” 538 Nature 257 (2016)

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(Digital) Life After Death

Twitter: Lives On.org

“When your heart stops beating, you’ll keep tweeting. Welcome to your social after life.”

Dead Social: Post-Mortem Social Media Communication Facebook LinkedIn Twitter

“Dead Social’s founders consulted with end-of-life experts when developing the tool, and as a result they compare it to actual memory boxes people often fill with treasures, letters, and photographs for loved ones to review over time.”

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How Will Families Collaborate and Make Decisions?

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Family Issues Requiring Collaboration/Governance

Easier

Holiday, Birthday, Anniversary Plans

Vacation Plans

More Difficult

CoPrivacy Investment and Security Opportunities Protocols

Most Difficult

Family Management Family Health Wealth Philanthropy of Shared Business Allocation and Life And Assets Employment.

Care Foundation Compensation, Decisions Management Succession

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Changing Paradigm for Family Collaboration and Governance TRADITIONAL FAMILIES

CONTEMPORARY FAMILIES

NUCLEAR FAMILY STRUCTURE

DIVERSE FAMILY STRUCTURES

AUTHORITY WITHIN HIERARCHY

NETWORKING, PARTICIPATION AND COLLABORATION UNDERGIRD AUTHORITY

CIRCUMSCRIBED COMMUNICATION

OPEN COMMUNICATION

CULTURAL HOMOGENEITY

CULTURAL DIVERSITY

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Echoes of a Changing Wealth Dialogue Prior Generations: Dialogue: None

Pre-Mortem Expectations:

What Will I Getâ&#x20AC;Śand When?

Post-Mortem Reaction:

What Was He (She) Thinking?

Contemporary Generations: Philosophical Concerns:

What Will Our Legacy Be? How Much Wealth is Too Much?

Practical Concerns:

How Will We Raise Self-Reliant/Resilient Children in Wealth?

When and How Should We Discuss Wealth with Children?

How Can We Develop Effective Family Collaboration and Governance?

How Can Philanthropy Contribute to Social Good and Family Well Being?

Tactical Concerns:

How Will We Provide for:

Aging Parents and Dependent Children?* Disabled Siblings?

How Should We Treat:

Full-Blooded Children Half-Blooded Children Step Children ART Children In-Laws Non-Marital Partners

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Developing a Holistic Understanding of Wealth The most difficult challenges wealthy families face are not financial, but instead they are relationship based and family based.

Charles W. Collier

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Family Wealth – Redefined*

Human Capital

Financial Capital

Intellectual Capital

Social Capital

• Charles W. Collier, Wealth in Families, Harvard University

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Family Wealth In Action

Family Communications & Governance

Educational, Professional & Social Endeavors

Values and Vision Financial and Estate Planning

Philanthropy

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Family Collaboration and Decision Making I

What’s the Issue?

II

Who’s Family?

III

Who’s at the Table?

IV

Which Table?

V

Who Has Decision Rights?

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Family Decision Making Continuum Study

Kitchen Table

Dining Room Table

Conference Table

Board Room

Parental Control

Family Consensus

Family Compact

Family Council

Governance Structures

Childrenâ&#x20AC;&#x2122;s Education Estate Planning for Minors

Social and Family Activities Rules of the Road for Family Communication Values Discussions

Estate Planning

Philanthropy

Health and Life Care Issues

Management of Shared Lifestyle Assets

Business and Entrepreneurial Endeavors, Asset Management Foundation Management

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W Family Genogram

Great

Grandfather

Aunt

Great Grandmother

Great

Great Grandmother

Grandfather

Husband

Grandfather

Great Grandmother

Great

Grandfather

Great Grandmother

Grandmother

Grandfather

Grandfather

Grandmother

Mother “Lioness”

Father “Lion”

Daughter

Great

Son

Wife

Daughter

Husband

Son

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Changing Family Structures

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Changing Family Structures

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Changing Family Structures

HERITAGE

LEGACY

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Estate Planning and Trust Management for a Brave New World We are such stuff As dreams are made on; And our little life Is rounded with a sleep

Shakespeare, The Tempest, IV.i.

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Bibliography “America’s Families and Living Arrangements.” United States Census Bureau (2013) Angier, Natalie, “The Changing American Family.” New York Times, February 2, 2018 Aucutt, Ronald D., “Identifying and Respecting the Core Elements of a Modern Trust.” University of Miami School of Law, Heckerling Institute, 2014

Beckert, Jens, Inherited Wealth. Princeton: Princeton University Press, 2004 Brokow, Tom, The Greatest Generation. New York: Random House, 1998 Collier, Charles, Wealth in Families, 2nd Ed. Boston: Harvard University, 2006 Collins, Chuck, Born on Third Base. White River Junction: Chelsea Green Publishing, 2016 DiRusso, Alyssa A., “Testacy and Intestacy: The Dynamics of Wills and Demographic Studies.” 23 Quinnipiac Probate Law Journal 23, 2009 Dukeminier, Jesse and Robert H. Sitkoff, Wills, Trusts, and Estates, 9th Ed. New York: Wolters Kluwer, 2013 Francesconi, Marco, Robert A. Pollak and Domemico Tabasso, “Unequal Bequests.” NBER Working Paper 21692, National Bureau of Economic Research, October, 2015 Friend, Ted, “Silicon Valley’s Quest to Live Forever.” The New Yorker, April 3, 2017 Gallo, Eileen and Jon Gallo, Silver Spoon Kids. New York: McGraw Hill, 2002 Gawande, Atul, Being Mortal. New York: Metropolitan Books, 2014 Gelman, Emily B., “What About Susan? Three’s Company, Not a Crowd: The Importance of Allowing Third Parent Adoptions When Both Parents Consent.” 30 Wisconsin Journal of Law, Gender & Society 57, 2015 northerntrust.com | © Northern Trust 2018

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Bibliography Goldstone, Hartley and Kathy Wiseman, Trustworthy, Denver: Trustcape LLC, 2012 Harrington, Brooke, Capital Without Borders, Cambridge: Harvard University Press, 2016 The Health and Retirement Study, “Aging In The 21st Century.” Ann Arbor: Survey Research Center, Institute for Social Research, University of Michigan, 2017

Jaffe, Dennis T. and James Grubman, Cross Cultures: How Global Families Negotiate Change Across Generations, San Francisco: Family Wealth Consulting, 2016 Lewin, Tamar, “Industry’s Growth Leads to Leftover Embryos, and Painful Choices.” New York Times, June 17, 2015 Langbein, John H., “The Twentieth-Century Revolution in Family Wealth Transmission.” 86 Mich. L. Rev. 722, 1987-88 Kurzweil, Ray, The Age of Spiritual Machines, New York: Penguin Group, 1999 Light, Audrey and Kathleen McGarry, “Why Parents Play Favorites: Explanations for Unequal Bequests.” NBER Working Papers 9745, National Bureau of Economic Research, 2003 Mason, Mary Ann, “Rethinking Stepparent rights: Has the ALI Found a Better Definition,” 36 Fam. L.Q. 227 (2002) O’Connell, Mark, “600 Miles on the Stump with the Transhumanist Candidate for President.” The New York Times, February 12, 2017 Odom, Raymond C., “Statements of Wealth Transfer Intent.” Trusts and Estates, April 2012 Pennell, Jeffrey N., “It’s Not your Father’s Buick, Anymore: Estate Planning for the Next Generation of Clients.” 34 ACTEC J. 2 (2008) Pew Research Center, “Millennials In Adulthood: Detached from Institutions, Networked with Friends.” March 7, 2014

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Bibliography Pew Research Center, “Family Support in Graying Societies.” Washington, D.C. May 21, 2015 Polikoff, Nancy D., Beyond (Straight and Gay) Marriage, Boston: Beacon Press, 2008 Restatement Third, Property (Wills and Other Donative Transfers), Washington, D.C.: The American Law Institute, 2010 Restatement Third, Trusts, Washington, D.C., The American Law Institute, 2001 Rothblatt, Martine, Virtually Human: The Promise - and The Peril - of Digital Immortality, New York: St. Martin’s Press, 2014 Stanton, Glenn T., “Can A Baby Have Three Biological Parents?” Citizen, April, 2017 Stone, Bruce, “The New Genesis in Estate Planning and Administration.” Miami: University of Miami School of Law, 2016 Taylor, Paul, The Next American, New York: Public Affairs, 2015 The National Marriage Project of the University of Virginia, “Knot Yet: The Benefits and Costs of Delayed Marriage in America.”

2013 Yau, Nathan, “Most Common Family Types in America.” Flowingdata, July, 2016

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IMPORTANT INFORMATION: This material is for information purposes only. The views expressed are those of the author(s) as of the date noted and not necessarily of the Corporation and are subject to change based on market or other conditions without notice. The information should not be construed as investment advice or a recommendation to buy or sell any security or investment product. It does not take into account an investorâ&#x20AC;&#x2122;s particular objectives, risk tolerance, tax status, investment horizon, or other potential limitations. All material has been obtained from sources believed to be reliable, but the accuracy cannot be guaranteed.

Legal, Investment and Tax Notice: This information is not intended to be and should not be treated as legal advice, investment advice or tax advice.

Readers, including professionals, should under no circumstances rely upon this information as a substitute for their own research or for obtaining specific legal or tax advice from their own counsel. northerntrust.com | Š Northern Trust 2018

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