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Estate Planning for High Net Worth Individuals

Wealthier families and those with highly appreciated assets have special estate planning issues

Financial advisors call them high or ultra high net worth individuals. People or families with highly appreciated assets or assets over five and a half million dollars have special planning issues to consider. These are complex issues that should be addressed by a high net worth estate planning attorney.


High Net Worth Planning Explained

What is a High Net Worth Individual?


This is a term used by the investment advisor community to describe a client with a certain level of liquid assets. The distinction of a High Net Worth or Ultra High Net Worth individual is useful in estate planning because it tells the planning lawyer that there are additional issues that must be addressed.
In estate planning there are always issues of control, descent, planning for incapacity, planning for asset protection. These are issues that will be discussed with just about any client. However, while the same issues need to be addressed for the high or ultra high net worth individuals or families, they also need to address complex tax issues.

Wealth Transfers Can Incur Big Taxes


Estate and Gift Tax is a Transfer Tax

Since the taxes concerned are primarily associated with transfers of wealth, any entity or individual who may during their lifetime or at death be transferring or leaving to their beneficiaries wealth over 5.5 million dollars (in some states) or over 11.5 million dollars in the United States, should consider a high net worth estate plan consult. These are very general statements and should in no way be construed as advice. The tax credits are adjusted annually on the federal level. And different states have different credits. Also, “high net worth” is a relative term. A client with a highly appreciated asset could incur significant tax savings with the appropriate estate plan, even if their net worth is below 5.5 million dollars (the level of wealth that is taxable under estate and gift tax in some states). That client may value the savings of hundreds of thousands of dollars as opposed to millions of dollars just as much if not more than the client who is going to save millions of dollars. Clients with highly appreciated assets should also learn the ways to minimize their tax liability.

Additional Issues For High Net Worth Estate Planning


High Net Worth Estate Planning is Complex

This is why individuals or families subject to the federal estate and gift tax, or a state gift or inheritance tax must use an estate planning lawyer well versed in planning for these issues. The potential tax liability for these families is in the millions, or tens of millions of dollars. While you may be one of those who accepts the tax burden, what if you could legally reduce your tax burden by millions or tens of millions of dollars with an estate planning technique? That is what planning for high or ultra high net worth individuals entails. A List of Issues That Should Be Analyzed for Estate Planning for Wealthier Clients

  • Estate and gift tax planning
  • Generation skipping transfer tax planning
  • Charitable giving estate planning
  • Business succession estate planning
  • Dynasty trusts

Why Plan When It Will Only Benefit After You Die?

Tax Savings Now (for You) and After Your Gone (for Them) The other issue that discourages some wealthy individuals and families from engaging in estate tax planning is that most of the taxes that are avoided are avoided after the planner dies. Some people are less interested in spending money or discomfiting their present status and control with a plan that will only benefit their beneficiaries, children or grandchildren. This is partly true. However, with the capital gains tax liability of many highly appreciated assets, the tax savings from a good estate plan can also accrue to the planner, or high net worth individual, during her or his lifetime.


The bottom line is without a consultation with a high net worth estate planning attorney, wealthier individuals and families will not know their potential tax liability or the potential savings a good plan can give them. The results are the potential savings of hundreds of thousands to the tens of millions of dollars in taxes.

High Net Worth Individuals in North America


Percentage of People Who Need An Estate Plan


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