Rich man sitting on private jet drinking champagne

High net worth individuals face different challenges when planning their estates. It’s not just a matter of having more money. Wealthy individuals face unique tax obligations, derive income from different sources, and have particular priorities when passing their estates to their heirs.

You need an experienced legal team to handle your estate. This trusted group will work with your financial advisors and accountants to develop an estate plan to preserve your estate, minimize your taxes, and carry out your wishes.

If you fail to develop a plan for your high net worth estate, you could leave the financial future of your spouse, children, and business at the mercy of the IRS and a probate judge. 

To discuss how Berkley Oliver can help you structure your high net worth estate plan, contact us for a free consultation.

How High Net Worth Estate Plans Differ from Other Estate Plans

We can help you find solutions to many of the challenges faced by high net worth individuals and their families. Some of these issues happen solely because of your wealth while others get exacerbated by it.

Some of the issues we can address when we prepare your high net worth estate plan include the following:

High Net Worth Estate Taxes

The U.S. tax code targets high net worth families with a unique tax called an estate tax. This tax only applies to large estates. It gets paid by your estate upon your death if the taxable estate calculated on the estate tax return exceeds the threshold value for the year of your death.

The taxable estate starts with the fair market value of all your assets upon your death after deducting certain expenses, debts, and allowances. Lifetime gifts are added back in before calculating the total estate tax.

For most estates, the estate tax is zero. In 2023, the threshold value is $12.92 million. This means that anyone who dies with less than $12.92 million in assets will escape the estate tax. But those with taxable estates above this threshold will risk paying a significant tax on the excess amount.

One of the goals of a high net worth estate plan is to try to avoid this tax. If we cannot structure your estate to avoid the estate tax, we will create a plan to preserve as much of your estate as possible for your heirs.

Inter Vivos Transfers

Inter vivos transfers include all the asset and wealth transfers that happen during your lifetime. Examples of inter vivos transfers include:

  • Gifts
  • Charitable donations
  • Formation of a revocable trust

Inter vivos transfers can reduce your estate value to avoid or minimize the estate tax. But they raise issues of their own, including the gift tax.

We will help you use gifts, charitable donations, and trusts before you pass on so that you can optimize your testamentary transfers upon your death.

Business Succession Plans

Many high net worth individuals own businesses or farms. As a majority owner, officer, or founder, you probably want some input into how your business will continue after your death. More importantly, the lack of a plan may throw your business and family into turmoil when you die.

A business succession plan combines steps that you take during your lifetime with asset and ownership share transfers that occur upon your death. 

As you plan for your passing, you may restructure your business, train your successor, or ensure that you have clear records. At your death, you will have a plan that will smoothly shift ownership from you to your designees.

High Net Worth Trust Structure

Most high net worth individuals understand the value of a trust. Since your estate planning lawyer forms the trust during your lifetime, it gets treated as an inter vivos transfer rather than a part of your estate. For some types of trusts, this means your trust assets avoid both estate taxes and probate.

But the value of forming a trust goes beyond preserving your assets. Trusts can also give you extraordinary control over your assets after you pass on. You can instruct the trustee on how you want the trust assets distributed. You can even set conditions for the beneficiaries to receive their trust distributions. 

For example, if you only want your children to receive their shares of the trust after they graduate from college, you can leave that instruction for the trustee.

Financial Power of Attorney

People with a high net worth need someone trustworthy to manage their finances if they become incapacitated. Without a financial power of attorney, you have no control over who controls your assets if you suffer from:

  • Coma
  • Dementia
  • Mental illness
  • Physical incapacity
  • Extended hospitalization

Unfortunately, mismanagement during a period of incapacity can waste all the assets you worked your entire life to obtain. Planning who will handle your finances if you become incapacitated can help you preserve your estate while providing for you and your family until the incapacity ends.

Contact Our High Net Worth Estate Planning Attorney

Virtually anyone can work their way up to run a business, own land, or practice a profession. With this hard work comes financial rewards. To discuss how you can ensure that the fruits of your labor get passed on to your family, contact the Shelbyville, Kentucky law offices of Berkley Oliver today for a consultation.