There are currently 75m Baby Boomers and 15m Silent Generation cohorts alive today. Of these, 66% will be dead in the next 20 years. This means there will be some 60m trusts/estates to settle in the next 20 years. The assets of these 60m trusts/estates are estimated to be valued in excess of $80t, which is 2x the value of all stocks in the U.S. or 4x the cumulative GDP in the U.S.
The Problem: The settlement of trusts/estates is complicated, time consuming and expensive. The frustratingly slow and opaque process to settle a trust/estate has not changed materially in over 100 years. There is no single reason why the settlement of a trust/estate is so inefficient. Instead, there is a confluence of issues that exacerbate this problem. The following is an incomplete summary of the reasons for the ubiquitous inefficiencies in the settlement process.
Complex Project Management: The trust/estate settlement requires the coordination of a diverse set of experts – CPA, attorney, investment advisor, real estate agent, life insurance agent, appraiser, bookkeeper, banker, etc. – coordinating complex technical subjects.
Non-Professional Successor Trustee: The modern drafting preference is to name non-professional family members or friends of the decedent to serve as the successor trustee. This means that in most cases the administration is being managed by an individual who does not have the time, interest, or experience to coordinate this complex, multi-disciplinary project.
Settlement Experts Leaving the Industry: The primary service providers for the settlement of trusts are CPAs and attorneys. At the very time when the need for more settlements professionals is needed (as a result of the graying population), the most experienced CPAs and attorneys are leaving the industry due to retirement or death.
Linear Project Management: Because the settlement process is complex and requires the coordination of various professional disciplines, a linear project management approach is often adopted. This “A then B then C” approach to managing the settlement misses the opportunity to speed up the workflow by engaging multiple sub-projects concurrently.
The Tyranny of the Urgent: The CPAs/attorneys who do the bulk of the trust/estate settlements do this work in addition to their other responsibilities. CPAs are all but unavailable to work on settlement projects during the first and third quarter of the year when tax returns are filed. And much of the attorney’s time is spent drafting estate plans rather than settling them. Very few practitioners exclusively focus on trust/estate settlement to the exclusion of all other tax or legal disciplines.
Call to Action
We in the trust and estate planning community should be exploring how to manage the wave of settlements that will be required of us during the next 20 years.
Anodos is committed to the settlement of trusts and estates twice as fast (6 months) at half the cost ($3k per $1.0m) with reduced risk to the successor trustee. We don’t have all the answers, but we are committed to finding them.
If your clients don’t have the time, energy, or experience to manage the trust settlement process, Anodos can help. We work in close collaboration with the successor trustee and the “settlement team” (CPA, attorney, investment advisor, etc.) to get the settlement done efficiently.
 Link to Cerulli Study
 Gerchiek, K. (2023) The CPA Shortage. Society for Human Resource Management. URL Link
 Runyon, N. Could the legal industry be entering a long-term lawyer labor shortage? Thomas Reuters. URL Link.
Josh Yager, Esq., CFP®, ChFC®
Anodos helps individual trustees save time, reduce their personal risk, and fulfill their fiduciary duties. We do this by helping trustees develop and maintain a series of governance documents which demonstrates they have fulfilled each of their duties of care. We also will act as an expert witness to defend our clients’ findings in court. What makes us unique is that trustee governance support is all we do. We do not manage money, sell insurance, or accept referral fees. We don't have a horse in the race.
We help trustees save time, reduce risk, and fulfill their fiduciary duties. What makes us unique is that trustee governance support is all we do.