High Net Worth Estate Planning

High net worth estate planning takes special considerations to ensure you and your loved ones are protected. High net worth individuals and families may require more complex estate plans. Your estate plan, no matter your net worth, should be tailored to your specific situation and goals. With higher net worth estates, if you have a seven-figure estate, it’s essential to plan for the future to ensure that your assets are distributed according to your wishes. Estate planning can be complicated, but it’s worth the effort to protect your family and your assets.

What to Consider for High Net Worth Estate Planning:

Understand Your Estate

The first step in estate planning is to understand the value of your estate. This includes all of your assets, such as real estate, investments, and personal property. Once you know the value of your estate, you can begin to plan for its distribution. This may sound somewhat easy, but it’s important to get to the bottom of what you own and how you own it. When creating your estate plan, you may need to transfer assets into the name of your trust. So start learning where your assets are and how they are titled.

Plan for Taxes

Estate taxes can take a significant portion of your estate, so it’s important to plan for them. The federal estate tax threshold is currently $11.7 million, which means estates valued below this amount are not subject to federal estate taxes. However, some states have their own estate taxes with lower thresholds, so it’s important to research your state’s laws and plan accordingly. Always consult with a professional in your area to make sure you have the most tax efficient plan.

Create a Will

A will is a document that outlines your wishes for how you want your assets distributed after your death. It’s important to have a will in place to ensure that your assets are distributed according to your wishes. If you don’t have a will, your estate will be distributed by your state, which means your assets could end up in the wrong hands. Also without a will, you risk putting your family through the probate process. Not only does this process take time and cost money, it also makes your case public. With a public probate case, you are leaving your loved ones open to potential lawsuits from unwarranted creditors trying to get a piece of your estate.

Consider Trusts

Trusts are legal entities that can hold assets for the benefit of beneficiaries. There are several types of trusts, including revocable and irrevocable trusts and each have their benefits to consider depending on your situation. Trusts can help you minimize taxes, avoid probate, and provide for your beneficiaries over the long term. Trusts can be complex, so it’s important to work with an experienced estate planning attorney in your area.

Review Beneficiary Designations

Many assets, such as life insurance policies and retirement accounts, allow you to designate beneficiaries. It’s important to review these designations regularly to ensure they align with your wishes. If you have a trust, you may want to name the trust as the beneficiary of certain assets. Just as you should update your estate plan regularly, you should also check beneficiary designations on all your accounts to ensure they still line up with your wishes.

Plan for Incapacity

Estate planning isn’t just about dividing your assets after you pass away. It’s also important to plan for incapacity, such as if you become unable to make decisions for yourself. Most often we think estate planning just has to do with your assets, but you need to make healthcare decisions as well. Who will advocate for you if you can’t advocate for yourself? How do you want your pain managed? These questions should be answered through documents such as a durable power of attorney and a healthcare directive.

Work with Professionals

Estate planning can be complex, especially for seven-figure estates and high net worth individuals. It’s important to work with professionals in your area, such as estate planning attorneys, financial advisors, and tax professionals. These professionals can help you navigate the complexities of estate planning and ensure that your wishes are carried out. You’ve worked hard to achieve your goals, make sure you’re getting help with the right plan to keep your goals on track.

Estate planning for seven-figure estates and high net worth individuals is essential to protect your assets and ensure that they are distributed according to your wishes. By understanding your estate and considering the steps above, you’ll keep yourself and your loved ones protected for generations to come.