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3 Holes in Estate Plans of High Net Worth Individuals

Posted on: July 21st, 2015
wealth transferThe financial concerns of the wealthy generally revolve around tax mitigation and asset protection. Whether this involves careful tax planning for assets in multiple jurisdictions or creating trusts, some estate plans fall short when it comes to managing wealth:
  1. Preparing family for inheritance. The 2015 U.S. Trust Insights on Wealth and Worth® survey (based on a nationwide survey of 640 HNW and ultra HNW adults with at least $3 million in investable assets) shows the majority of HNW individuals value preserving accumulated wealth for children and future generations. However, only 20 percent believe the next generation would be able to manage assets properly. Our asset preservation attorneys reviewed a few methods concerning optimizing wealth transfers here.
  2. Comprehensive outlook. Without the regular guidance of an estate planning attorney, critical areas might be neglected. Estate planning issues that could be discussed and addressed include rising long-term care costs and longer lifespans, legislation changes, and family goals.
  3. Addressing healthcare. Although a comprehensive approach is important, the U.S. Trust survey found the top priority of nearly all HNW individuals is health. HNW individuals value improving and preserving family health. Start discussions with an attorney how to protect assets for the well-being of loved ones as they age and how to manage unforeseen health issues. Keep advance directives and powers of attorney up-to-date. These tools give an appointed individual the power to make healthcare and critical financial decisions on behalf of another individual in the event they become incapacitated. 

All of the states our estate planning attorneys serve have a high concentration of HNW families. Florida’s ultra-rich population grew almost 12 percent between 2013 and 2014, according to Wealth-X and UBS World Ultra Wealth Report, which included individuals with $30 million or more in net assets. The report included the nation’s “Top 25 States With Super-Rich”; how did the states we serve rank?
  1. New York #2
  2. Florida #4
  3. North Carolina #17
  4. Tennessee #19

Inadequate estate planning appears to be a shared problem among the wealthy. The U.S. Trust survey found that 80 percent of HNW individuals feel their estate plans need improvement. As generations shift, family needs evolve as well. Understanding wealth management trends can help individuals make decisions about dividing an estate among family members.

By Attorney Samantha Reichle
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