The Goals of High-Net-Worth Estate Planning and How to Reach Them

We all need estate plans to arrange for a secure future and a comfortable retirement and protect ourselves and our loved ones from unexpected challenges. Those with high-net-worth estates, however, may have to rely somewhat on ways of going about achieving these goals. 

At Surprenant & Beneski, P.C., we deal with a diverse clientele in Southeastern Massachusetts, some of whom have moderate incomes and some of whom have sizable estates. This blog will discuss some of the ways you can protect your assets and your family if you fall into the latter category. 

What is high net worth?

Presently, an estate that has a value of more than one million dollars in liquid assets is considered high net worth. Of course, that definition may be altered in the future as the economy changes.

Areas of Concern for High-Net-Worth Estates 

The majority of individuals creating estate plans are trying to amass and protect assets to fund higher education and retirement, and make sure they have enough money to last through their lifetime, hopefully with funds left to bequeath to their heirs. Those of high net worth, on the other hand, have already met this goal and are looking forward to having their estate planning attorneys advise them about:

  • Avoiding probate
  • Reducing estate taxes
  • Protecting assets for future generations
  • Exercising control over the distribution of their wealth when they die
  • Maintaining the integrity of their legacy
  • Preparing for generous charitable giving

Reaching these objectives requires the services of an experienced estate planning attorney who will guide them carefully and customize their estate plan to meet their particular needs.

Strategies We Recommend for Our High-Net-Worth Clients

Make sure all of your property is titled correctly since titling and ownership structure will impact whether you have to go through probate, your asset distribution, and how much you will be required to pay in estate taxes.

Create trusts and use them wisely. Trusts can be excellent tools for protecting assets from probate, excessive taxation, creditors, and lawsuits. They are also valuable in terms of protecting family members with special needs, and those who become incapacitated or have trouble managing their finances. They also protect beloved pets who may outlive their owners.

Benefit by giving gifts. This is a practical way to distribute wealth while you are still alive and can see your beneficiaries enjoy their inheritance. This practice also reduces the taxable value of your estate. There is no cap on the number of people you can gift with up to $17,000 ($34,000 per couple) in a year (as of 2023). In some cases, you may prefer to pay college tuition or buy a car or home for a grandchild.

Planning for Business Succession. Because it is common for high-net-worth individuals to own businesses, this may be an important area of focus for you and your estate planning attorney. Creating a strategic business succession plan ensures that your business interests will be efficiently transferred to your heirs when you retire, become incapacitated, or pass away. 

Avoiding Estate Taxes. In 2023, if your estate is worth $12.92 million or less, you don’t have to worry about the federal estate tax. Lifetime gifts above the annual gifting exclusion described above will, however, reduce the amount of gift and estate tax exemption available. If the value of your estate is above the $1 million threshold, the Commonwealth of Massachusetts imposes a graduated estate tax rate.

The Takeaway

If you have a high-net-worth estate, you need the informed representation and personalized attention Surprenant & Beneski can provide. Contact us today to discuss your best options.