The idea of Estate Planning can be unnerving due to the morbid nature of the conversation. However, Estate Planning is an essential part of planning for your future to guarantee that all of your assets are in order in case you find yourself in an unexpected situation. Estate Planning is also important to protect your minor children and also ensures that your wishes regarding your health decisions are met.
Estate Planning involves creating a well thought out legal document with clear instructions detailing how you want your assets distributed upon death. You Will can include anything from real estate, to bank accounts, to cars, jewelry and more. It can also include your Powers of Attorney for both healthcare and financial matters.
One of the main benefits of Estate Planning is the knowledge that you will have full control over what happens to your assets when you die. If you do not have an Estate Plan set out, your assets will go to probate court, giving you no say over who will receive your assets. The reason Estate Planners want to avoid Probate, is largely due to the added time and expense that it brings to the heirs. Most types of probates will involve hiring an attorney, waiting for court dates and decisions, court fees and more legal paperwork and filing.
Having an Estate Plan in place makes the transition of your assets much less time consuming and costly and allows you to put your stamp on how your health and finances will be handled.
Estate Planning will look different for everyone depending on your background and the assets that you have accrued over your lifetime. These variances can make Estate Planning seem more complicated, especially for those with a high net worth and who may have more assets than the average person. Trust & Will wants to help make this process easier for you, which is why we have put together a list of considerations specifically focusing on your needs as high net worth individuals. People who have a high net worth when Estate Planning will want to:
Tips on Estate Planning for High Net Worth Individuals
Estate Planning can often feel like a monumental task when you are already trying to juggle your daily responsibilities. However, with so many unknowns regarding the future, you will want to make Estate Planning a top priority now before it is no longer an option. People with a high net worth will have a sizable share of finances and assets to account for, and you will want to make sure they end up in the right hands before it is too late.
Carefully consider your Financial Power of Attorney
If you are an individual with a high net worth, it will be very important for you to choose your Financial Power of Attorney wisely. Your Financial Power of Attorney documents will legally dictate who you have designated to be in control of your finances when a situation arises in which you cannot be responsible for them yourself, such as when your health prevents you from being capable of making decisions. In these instances, it will be beneficial to have a trusted individual with the authority to be your Power of Attorney. With a high net worth comes more complicated financial decisions, and you will want to choose the right person for the job in your absence.
When you have a high net worth, it is often more likely that people will enter your life in the hopes of taking advantage of your wealth. This means that you may have to be more cautious with the new people entering your circle to make sure they are choosing to be in your life for the right reasons. This level of care will also want to be used when picking your Power of Attorney to ensure that your finances end up in trustworthy hands.
Learn about your tax laws in relation to inheritance
When you are Estate Planning and deciding on inheritance for friends and family for when you pass away, consideration needs to be taken into account for state and federal taxes regarding inheritance. Looking into these tax laws will be exceedingly important when you are a high net worth individual because it is more plausible for you to reach the tax exemption limit on inheritance for family and friends, which may make you want to evaluate your inheritance plans.
At the federal level, once your estate inheritance reaches past $11.70 million, those receiving your estate inheritance will be subject to paying federal estate taxes on the inherited assets. This is just one example of the different tax laws you will want to make yourself aware of at the federal level, and it may be that your state has additional tax laws on inheritance. This can often lead high net worth individuals to gift or donate portions of their assets as they get older in order to avoid some of these taxes, an option that you may want to consider.
Create a Living Trust
As a high net worth individual, you will also want to create a Living Trust, which is when you create a legal relationship with an individual, also known as your Trustee, who will become responsible for your assets in the event that you cannot take care of them yourself. This is a beneficial legal document to create as a high net worth individual because it is likely you have a large portion of assets that you will want to make sure are protected and end up in the right hands once you cannot oversee them yourself. With a living Trust, you can guarantee that your assets will be protected.
High net worth individuals can often find Estate Planning a confusing and time-consuming process, as you have more assets to account for than the most people. Trust & Will knows how time consuming and confusing Estate Planning can be, and for this reason is determined to simplify the process for you with our affordable online Estate Planning services. With Trust & Will, you can create a Trust-Based Estate Plan and a Will all online at an affordable price. Visit our website today to find out more about Estate Planning for high net worth individuals!