Important Considerations for High Net Worth Estate Planning

Most people are familiar with the basic needs of an estate plan: Will, Revocable Living Trust, Durable Power of Attorney and a Living Will or Health Care Power of Attorney. But high net worth estate planning requires individuals to also ensure that their estate plans are sophisticated and thorough enough to protect larger assets like real estate, business interests and large investment portfolios in the most advantageous way for both their assets and beneficiaries.

It’s important to remember that large estates may be subject to larger tax implications like estate and gift taxes, and any appreciating assets may also be subject to capital gains taxes. Below are a few often overlooked, but very important, considerations for high net worth estate planning:

Inflation: Rising inflation can negatively impact the worth of your estate over time. While there is no way to accurately predict what inflation will be when your beneficiaries receive their distributions, it’s a good idea to factor it in and continually revise your plan as conditions change.

Market Fluctuations: Appreciating assets will fluctuate in value over time thanks to average market volatility. Consider a plan that will protect your assets long term from potential market downturns.

Law Changes: Tax and estate planning laws are never truly set in stone, which makes it extremely important to periodically review your estate plan and make adjustments for any changes. Work with a trusted estate planner to understand the nuances of gift, estate and generation-skipping transfer tax limits.

As you’re working through your advanced estate planning process, it’s important to be wary of the potential pitfalls that can derail your goals if things aren’t handled properly:

Your assets may not be distributed according to your wishes if your trusts, wills, etc. are not adequate for your needs and do not remain current with tax and estate laws.
Your assets may be subject to unnecessary taxes if your plan is not properly structured.
Your assets may be contested by heirs or other family members if it is not clear and concise. This can lead to drawn-out and expensive litigation.
Understand beneficiary designations on life insurance and tax deferred accounts

Ensure your estate plan is broad enough and structured appropriately to protect your assets by keeping the following in mind:

Start planning as early as possible so you have time to make the best, informed decisions for your situation.
Talk with your family and keep them informed on your goals, to hopefully avoid any surprises later on.
Review your estate plan regularly. Your assets and goals may change as you age, as can your family dynamics. Keeping your estate plan up to date will avoid any legal complications for your beneficiaries later and provide you peace of mind that your assets will be distributed to your wishes.
Work with a qualified estate planning attorney who can help you navigate the nuances of tax and estate laws, establishing trusts, and can tailor a plan that is specific to your needs.

At Hackstaff, Snow, Atkinson & Griess, our estate planning attorneys are well-versed in the complexities of estate and tax laws, and can help you create a thorough estate plan. Contact us today for free consultation.