Estate Planning Tips for High Net Worth Individuals

Estate planning just isn’t for the very wealthy. There are actually certain approaches that wealthy people need to take when it comes to proper estate planning to make sure that their assets are distributed according to their wishes upon death.

There are actually several different aspects of a proper estate plan to consider.

The Basics

Covering the basics in estate planning is vital. Things like a comprehensive will, establishing a person to have power of attorney and a living will, otherwise known as a medical power of attorney, is necessary to any proper estate planning regardless of your net worth.

The wealthy often like to establish trusts as well. Trusts take care of a few different things. Firstly, they legally set out how and when your assets are distributed to your heirs upon your death.

Trusts also allow for lesser tax burden when transferring assets or gifts to your heirs. Lastly, they speed up the process of these transfers by circumventing the probate court process.

The Tax Reality

The fact is that if you have a large amount of wealth, there will be taxes on the money and assets you eventually give to others, be it family or friends.

People of lesser wealth my be able to avoid higher taxes by coming in under established exemption thresholds. For people with excessive assets, however, the tax implications of gifts or the transfer of assets can be significant, sometimes in the range of 45% of the value of the gifts or assets.

Because your beneficiaries may not be aware of the tax implications, you need to ensure that they understand that while you may be able to lessen their tax burden, there will be taxes to pay.

They shouldn’t be blindsided by their tax obligations upon your death. The only exception to tax liabilities is if you are transferring all assets to your surviving spouse.

Keeping People in the Loop

Regardless of how comprehensive and detailed a will is, there is always a chance that a disgruntled relative may dispute it. Most of the time, this simply stems from a lack of information.

That’s why, when you spell out your wishes in a will, you should inform those people of your wishes now rather than waiting until the will is enacted. Explain to them your wishes and if you feel so inclined, explain to them why you came to this decision.

Additionally, if you make any changes to your will, it’s important to inform all people involved.

Professional Advice

Lastly, always consult with a expert estate planner when you are planning for the transfer of gifts or assets upon your death and avoid trying to do it yourself. Most wealthy people already know this, but if you are from new money, it’s important that a professional estate planner take the lead in this process. This will limit the issues that could occur after your death.

Estate planning may not be something on the top of your list, especially if you are young. But now is better than any time to make sure your finances are in order for people that you truly care about.

Take the time to meet with an estate planner and begin the process of preparing for the future of the people that you love.

Author Charlotte Howard thinks all individuals (regardless of their net-worth) need to estate plan in advance. She works with attorneys at Makinson & d’Apice – check out legal wills from  

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