The largest intergenerational wealth shift in modern history is accelerating structural changes across the US financial services sector, with banks, wealth managers and fiduciaries facing increasingly complex risk environments as trust-held assets expand in scale and diversity.
According to a 2023 report by The New York Times, an estimated $84 trillion in assets is expected to pass from older generations to heirs by 2045, with as much as $16 trillion moving within the next decade alone. This “Great Wealth Transfer” is being driven largely by aging baby boomers, who currently hold roughly half of the nation’s $140 trillion in household wealth.
While the figures underscore the sheer magnitude of capital being shifted, industry specialists note the more immediate impact is being felt in how that wealth is structured and insured.
Trey Martino (pictured), head of financial institutions and professional services US middle market at Zurich North America, said the transfer is accelerating the adoption of trusts beyond their traditional ultra-high-net-worth base.
“Trusts have historically been viewed as a niche tool, but today they are becoming a mainstream mechanism for transferring wealth across generations,” Martino told Insurance Business. “As a result, we expect the ‘Great Wealth Transfer’ will not only increase the utilization of trusts but also the assets held in trusts.
“We are also seeing this reshape the landscape where trust and wealth management services were once only offered by traditional banks. Now we are seeing them being offered by fintech and non-depository financial institutions alike.”
Martino noted that trusts now increasingly include a mix of asset types, including commercial real estate, agricultural land and properties with varying occupancy profiles, where they once primarily held high-value residential properties.
At the same time, these assets are becoming more geographically dispersed. Multi-state portfolios are now common, reflecting both investment diversification strategies and the geographic spread of beneficiaries.
Because of this, managing insurance can be difficult if a carrier doesn’t offer solutions across state lines, said Martino.
This dispersion is also occurring even as individuals relocate for tax or lifestyle reasons. While wealth holders may shift residency away from states like California and New York, the physical assets within trusts often remain in place. This creates additional geographic risk exposure.
At the same time, demographic shifts among beneficiaries are changing expectations. Younger heirs (primarily Gen X, millennials and Gen Z) tend to engage differently with financial institutions, placing greater emphasis on digital access, flexibility and transparency.
Some are also choosing to decouple wealth management from traditional banking relationships, opting instead for specialized or technology-driven providers.
“As the complexity of their financial portfolio changes, they need an advisor to help them. Some beneficiaries may choose to decouple their wealth services from traditional banks, which is why we have made our product available to any financial services firm that acts as a fiduciary on behalf of trusts,” Martino said.
The growth in trust usage is also reshaping the competitive landscape. Services once dominated by traditional banks are now being offered by fintech firms and non-depository institutions, increasing competition and driving innovation in both advisory and insurance solutions.
As institutions expand deeper into fiduciary services, new liability exposures are emerging. The broader range of assets held in trusts combined with their geographic spread creates challenges, according to Martino.
A key risk lies in fragmentation. Without unified insurance frameworks, he said, institutions may struggle to maintain visibility across portfolios, increasing the likelihood of coverage gaps or administrative errors.
“Many institutions are seeking centralized approaches that can handle multiple property types across states without adding operational friction,” Martino said. “That helps them manage risk more efficiently and deliver a smoother experience to clients.”
Looking ahead, the intersection of wealth transfer, technology adoption and evolving client expectations is expected to keep trust services on a strong growth trajectory.
In response, insurers are adapting products to better align with the evolving needs of fiduciaries. Zurich North America recently updated its long-standing Trust Protector Policy, which consolidates coverage for trust-held assets under a single master structure.
The offering now accommodates multi-state residential, commercial and farm properties, while incorporating updated policy language and expanded limits to reflect current market conditions. The insurer has also broadened its geographic reach to include key states such as New York, Texas and Florida.
The move reflects a broader industry trend toward centralized, scalable insurance solutions that reduce administrative burden for institutions managing large volumes of trusts.
“The size and pace of the wealth transfer suggest that trust services will remain a key growth area,” Martino said. “Insurance will play a critical role in helping financial institutions deliver consistent, relationship-based experiences to their clients.”
