Essential Elements Of A High Net Worth Estate Plan


High net worth individuals and families have unique estate planning needs, so they should look for an attorney who understands them. With the nation’s tax laws in a state of flux, a lawyer must remain abreast of all recent changes, as well as any proposed changes that could soon be passed into law.

At Lawrence Law Office, our team has prepared estate plans for many high net worth individuals. Below, we summarize some of the key considerations that go into creating a solid plan, and we would be happy to discuss them in detail in person.

Trusts

Our high net worth clients often use trusts, because they can help minimize estate and other taxes. We discuss in detail our clients’ goals and then select the trust that works best for them. Some of the more important tax limits we keep an eye on our estate, gift, and generation-skipping transfer tax limits:

  • For 2020, the exemption for gift and estate taxes (called a “unified credit”) is $11.58 million per individual. Married couples can double this amount.
  • Generation-skipping transfer taxes get paid when a client gives property to a grandchild or great-grandchild. There is an exemption of $11.58 million.

With a trust, the grantor (or settlor) signs over assets, which are then owned by the trust. The grantor also names a trustee to manage the trust assets. With a living trust, our clients can serve as trustee and a successor trustee takes over at death. With other trusts, however, an attorney or financial institution will serve as trustee.

The selection of the proper trustee is a critical decision and one we spend considerable time on. We can use our experience to identify those with the proper credentials and experience to manage your estate. With the wrong trustee, the value of the trust could decline dramatically, and beneficiaries will not reap the benefit they are entitled to.

Provisions For Dependents

Many high net worth individuals want to provide directly for children and grandchildren instead of leaving everything to their spouse. We can help you accomplish your goals, such as paying for your child’s college or creating a steady stream of income for them when they become adults.

One goal many clients have is ensuring that their dependents do not waste all the assets left to them. Creating a trust is often a good choice since the trustee will control the assets for the benefit of your dependent.

You might also purchase life insurance, especially if you are relatively young. There are many life insurance products, and not all are a good investment, but an estate planning attorney can review your options.

Financial Power Of Attorney

In the event you become incapacitated, someone must step into your shoes to manage your financial affairs. With a durable financial power of attorney, you can nominate an agent who will take over.

Many people simply choose their spouse or child to serve in this role. However, high net-worth individuals often want someone with more specialized financial experience to manage their finances. This person could sell property, collect rents, and adjust investments to respond to market conditions. Finding someone with adequate experience is necessary to preserve the value of your estate.

Medical Considerations

Like all individuals, our high net worth clients must prepare for end-of-life decision making. We can create a living will, which details what life-saving treatment you want, and draft a health care power of attorney to nominate a person to act as your agent for medical decisions when you are incapacitated.

Privacy

Probate is a public process. If you are well known, then the news media might take an interest in how many assets you had at death. Many high net worth clients want to protect their family’s privacy, so they ask about estate planning methods for avoiding probate.

Fortunately, there are ways to accomplish this, such as using trusts or joint ownership of property. Some assets have a designated beneficiary, which is true of retirement accounts and life insurance. Payable on Death (POD) accounts also pass outside probate.

Give Us A Call Today To Find Out More

There is nothing more important than providing for your loved ones once you are gone. At Lawrence Law Office, our high asset divorce lawyers have helped high net worth individuals craft individualized estate plans that minimize their tax obligations and set up their families for a secure future.

If you would like to learn more, contact us directly. We can meet to discuss your goals and the best ways for achieving them.