Estate Planning Business Booms in Japan

Estate planning business in Japan appears to be on the verge of a boom.  The following excerpts are from Atsuko Fukase, Where There’s a Will, Mitsubishi UFJ Finds a Way, Wall St. J., July 17, 2008, at B6.

Dealing with the aging of Japan’s population is enough to give many a corporate president gray hair.

But while most fret about how to cope with a dwindling customer base and slowing consumer spending, Mitsubishi UFJ Trust & Banking Corp. President Kinya Okauchi is set to mine a rich vein of senior-citizen business.

That’s because his operation, the trust bank owned by Mitsubishi UFJ Financial Group Inc., is a leader in developing wills and inheritance operations in a country where nearly one person in four will be over 65 by 2010, up from one in five in 2005.

“Demand is very strong. As a trust bank, we are in a good position to respond to society’s changes and demands,” said Mr. Okauchi, newly arrived as the head of MUTB, the unlisted unit of MUFG, the country’s biggest bank by assets, and now managing wills whose collective assets it values at 5.5 trillion yen ($52.5 billion). * * *

And in a country where wills have by tradition simply gathered dust in locked drawers, the Western concept of employing a bank to smooth out inheritances is rapidly gaining allure, bankers say, in part speeded by an expansion in real-estate ownership, MUTB has said.

MUTB, formed in 2005 from the merger of Mitsubishi Trust & Banking Corp. and UFJ Trust Bank, isn’t alone in tapping a business that has grown by more than 50% in the past five years, according to the Japanese trust banking industry lobby group.

But MUTB says it had about 20,400 wills under management as of March, nearly double its nearest rivals. Mizuho Trust & Banking Co., an affiliate of Japan’s second-biggest bank, Mizuho Financial Group Inc., said it had 12,500 wills under management, while Chuo Mitsui Trust & Banking Co. had around 10,700.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.