California Financial Partners

Building Trust Through Expertise & Integrity

  • Company
    • Our Process
      • Components of a Financial Plan
      • Investment Vehicles
      • Your Total Wealth Management Solution
    • Policies
    • Contact
  • Meet the Team
  • Resources
    • LPL Resources
    • LPL Podcasts
    • Outlook Videos
    • CALFP Blog
  • Login

October 11, 2022 By Michael Milam

A Quick Guide to Estate Planning for Those With High Net Worth

Even if you never thought of yourself as especially wealthy, there may be a fair chance that you fall into the category of “high net worth individuals”—those who have liquid assets of $1 million or more.1 For many individuals who hope to leave a legacy for their loved ones, estate planning may take on new importance. Here are two estate planning tips every high-net-worth individual should consider.

Create a Will and Keep it Current

In America, 68% of adults do not have a will. This group includes those with no net worth and those with substantial assets.2 Someone with few assets who dies intestate (without a will) creates a hassle for their loved ones who must go through the legal process of court probate. However, someone with significant assets who dies without a will could be setting up their heirs for a long and expensive legal battle.

Without a will, you have no control over how your estate is managed and distributed. Instead, assets will flow to your heirs based on your state’s laws of intestate succession. Even a simple will may help you execute your wishes and help your loved ones after your death.

It is vital to review and update your will periodically. For example, if it refers only to children, you may want to update it after grandchildren enter the picture. And if you marry, divorce, or remarry, you likely want to amend the beneficiaries of your will as well.

Avoid Probate with a Trust

Many high-net-worth individuals hold their assets in a trust for several reasons:

  • It may help manage taxes while still allowing for control of the assets.
  • It bypasses probate upon the settlor’s death.
  • It may allow the trust settlor to preserve assets for the heirs by shielding them from being counted in means-tested government programs such as Medicaid.

Bypassing probate is at the top of the list for those who desire privacy. Probate proceedings are matters of public record. In states where court records are available online, just about anyone may look up the details of an estate. Those with significant assets are unlikely to want their neighbors to know exactly how much was distributed and to whom. Trust information is private. Any funds transferred via a trust may remain confidential if the parties desire privacy.

Another benefit of a trust is it helps those who want to place conditions on their loved one’s use of their funds. For example, suppose you do not want your 18-year-old child to suddenly become super wealthy upon your untimely death due to concerns about how they might spend the money. In that case, you might require the trustee to provide them with income from the trust and limit other withdrawals. Other types of trusts, like spendthrift trusts, are specifically designed to help curb overspending and safeguard the principal asset to preserve its value.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

LPL Tracking #1-05313105

Footnotes

1 High-Net-Worth Individual (HNWI), Investopedia, https://www.investopedia.com/terms/h/hnwi.asp

2 68% of Americans Do Not Have a Will, The Conversation, https://theconversation.com/68-of-americans-do-not-have-a-will-137686

Filed Under: Mike Milam

Recent Posts

  • Building a Company without Adequate Insurance
  • What You Should Know About the SECURE Act 2.0
  • What Does The SECURE Act 2.0 Mean For Small Businesses?
  • Thinking About Working in Retirement? Here’s What to Consider
  • Tips for Growing (and Preserving) Your Family Business

Categories

  • Edward Johnson
  • Mike Milam
  • The Biggest Mistakes in Financial Planning Series
  • Uncategorized

Glendale, CA Office

California Financial Partners, Inc.
700 N. Brand Blvd.
Suite 640
Glendale, California 91203
Tel: 818-550-9955

  • Home
  • Meet the Team
  • Our Process
  • Publications
  • Tools
  • Login
  • Policies
  • Fee Schedule
  • Privacy Policy
  • Disclaimers
  • Strategic Partners
  • Contact

California Financial Partners, Inc., A Registered Investment Advisor, is a fee-based comprehensive financial planning organization. Securities and Advisory services offered through LPL Financial. A Registered Investment Advisor. Member FINRA & SIPC.

The LPL Financial Registered Representatives associated with this site are currently registered to discuss and/or transact securities business with residents of the following states:
AZ, CA, CO, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, MA, MD, ME, MI, MO, MT, NC, NE, NH, NJ, NM, NV, NY, OH, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI, WY.
If you are in a state other than those listed, we will acquire the appropriate state license so that we may serve you.

Copyright © California Financial Partners, Inc.