High Net Worth Planning Lawyer

What Are The Estate Planning Strategies For High-Net-Worth Families?

• Last Will & Testament – Every estate plan includes a last will and testament. This document represents your final wishes. It also functions as a backstop in case there are any problems with the validity of your living trust.
• Guardianship Designations for Minor Children – These designations are included in your will and nominates guardians for your minor children.
• Minor Children Wealth Planning – Wealth transfer planning for minor children is a complex endeavor. You can’t actually leave money to minors as they are deemed legally incompetent. Likewise, it’s usually not wise to give large amounts of wealth to immature family members if you’d like future generations to benefit from your hard work.

• Trusts – Trusts form the backbone of a high net worth individual’s estate plan. Starting with the revocable living trust, which helps avoid probate, to more advanced tax planning strategies such as a GRAT (grantor retained annuity trust), QPRT (qualified personal residence trust) or ILIT (irrevocable life insurance trust), the trust is the tool used to reduce your tax liability, stave off the IRS, and ensure intergenerational wealth.

• Trustee Selection Planning – Just as the trust is the backbone of a wealth transfer plan, trustee selection will make or break the trust. Who you trust (financial advisors, estate planning attorneys, or your partner) is critical to the success of the trust. Your trustee should be competent, trustworthy, and able to make hard decisions. In addition to the initial selection, we will help you plan for future trustee selection issues.

• Tax Planning – The IRS is out to get us. Whether it’s the gift tax, inheritance tax, generation skipping transfer tax, or the lowly income tax, the IRS wants your wealth. Through the use of a variety of tax minimization strategies such as charitable giving to nonprofits, private foundations, or the disclaimer trust we can help high net worth individuals or married couples reduce their tax burden.
• Gifting – Even lifetime gifting isn’t tax free. The IRS allows for an annual exemption of $16,000 in 2022 ($17,000 in 2023) until the gift tax is imposed on gifts above that amount. It is important to retain qualified legal advice regarding your estate planning needs so as to ensure you do not run afoul of any of the IRS’s arcane rules such as the step transaction doctrine.

• Charitable Gifting and Philanthropic Goals – It is quite common that high-net-worth individuals desire to leave all or a portion of their wealth to charitable groups or private foundations. This can be accomplished a few different ways in the estate planning process. The simplest method is to directly donate or name a charity as a beneficiary of your estate. Alternatively a charitable lead trust (CLT) or charitable remainder trust (CRT) are charitable donation options with tax planning advantages. Some tax benefits from giving to charities include a reduction in capital gains tax, income tax deductions, tax deferrals, and reduced estate tax.

• Life Insurance – Life insurance is a helpful way to provide liquidity when a closely held business or other hard to sell asset is passed on. It’s frequently used in buy/sell agreements so that one partner may buy out the other’s estate. It can also be used to defer taxes or as part of a series of lifetime gifts held within an ILIT (irrevocable life insurance trust).
• Incapacity Planning – Unfortunately, incapacity is an all too likely scenario for most of us. But it needn’t be fatal to your estate plan. By planning for incapacity, you can rest assured that even if the worst case scenario happens, you and your plan will be well taken care of. The tools used for incapacity planning include: revocable living trust, financial power of attorney, and healthcare power of attorney.
• Financial Power of Attorney – The financial power of attorney allows a trusted agent to act on your behalf financially. You need not be disabled, but most people use this document as a “break in case of emergency” plan. By having a financial power of attorney in place, you can avoid a costly conservatorship and maintain your rights in case of incapacity.
• Medical/Healthcare Power of Attorney – A medical power of attorney or healthcare directive in Arizona, allows a trusted person to make medical decisions on your behalf. Decisions such as choice of provider, which assisted living facility, and whether to continue on life support. The Arizona Healthcare Directive is designed to prevent the Terry Schiavo scenario. It will clearly lay out your wishes in case of permanent incapacity. It will also prevent unscrupulous heirs from sending you to the worst nursing home possible.
• Living Will – The living will is a document which instructs your healthcare agent on which end of life choices you would prefer.
• Health Insurance Portability Accountability (HIPPA) Authorizations – A HIPPA authorization is a legal document which gives your medical professionals permission to share your healthcare records with your trusted persons.