{"id":906,"date":"2017-11-20T19:29:23","date_gmt":"2017-11-20T19:29:23","guid":{"rendered":"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/?page_id=906"},"modified":"2022-08-24T20:13:55","modified_gmt":"2022-08-24T20:13:55","slug":"estate-planning-high-net-worth-individuals","status":"publish","type":"post","link":"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/blog\/estate-planning-high-net-worth-individuals\/","title":{"rendered":"Estate Planning for High Net Worth Individuals"},"content":{"rendered":"
Estate planning is important for everyone, but it is especially essential for high net worth individuals. A larger estate significantly increases the likelihood of heirs squabbling over who gets a piece of the pie, and individual estates worth more than $5.49 million will be subject to estate taxes<\/a> that can erode the value that beneficiaries will receive. Estate planning becomes an intricate process that requires careful planning and consideration, much beyond a simple will. As you sit down with your estate planning professional, here are seven topics that need to be addressed:<\/p>\n If you become incapacitated, perhaps due to an illness, aging, or an accident, you will need someone to handle your financial affairs. This individual will need the authority to manage your financial holdings, pay your bills, provide care for your dependents, and act as steward over your estate as long as you are unable to do so yourself. Typically, people choose a spouse or an adult child for the role, but it\u2019s not uncommon to see a trusted financial or legal advisor fulfill the obligation. Whomever you choose, you can grant them the legal authority to act in your name through a durable power of attorney<\/a>. The power of attorney can broadly authorize the steward to do anything on your behalf, or it can restrict their authority to certain assets or accounts.<\/p>\n While it\u2019s an uncomfortable subject, healthcare is an unavoidable part of end-of-life planning. Even if you are able to avoid hospice care, you may be subject to accidents or unexpected illnesses that necessitate life-or-death decisions in a hospital. To prepare for this, it\u2019s best to draft a living will\u2014also known as an advance healthcare directive\u2014and provide a trusted family member with a healthcare power of attorney. The advance healthcare directive will set forth your preferences and expectations regarding healthcare and life-sustaining treatment, and the healthcare power of attorney will give someone the ability to make important medical decisions on your behalf should you become incapacitated (much like the durable power of attorney, though this one is limited to healthcare decisions). The holder will be subject to whatever instructions you draft in the living will.<\/p>\n If you hold an interest in a business, you\u2019ll need to counsel with an attorney who specializes in this practice to address how your interest will be transferred. The laws governing business succession vary from state to state, but there can be crippling taxes and legal challenges if you wish to pass your business interests to your heirs. As a side note, it may be wise for your business partner(s) to take out a life insurance policy on you, so that when you die, they can purchase your share of the company from your surviving heirs, allowing them to retain control of the business, and your family to profit from the sale.<\/p>\n Before you begin to divvy out shares of your estate, make a list of everyone you\u2019d like to list as beneficiaries. The list will probably be predominantly family, but you may wish to include friends, business partners, and charitable organizations, too. As you\u2019re doing this, note any heirs who may expect an inheritance but, for whatever reason, will not receive one. Once you\u2019ve made your allocation decisions, have a frank conversation with the people on the latter list, as they will be the most likely to contest your will if they feel unrightfully excluded. If there are any beneficiaries who will be included but may receive less than they expect, make sure they know what they\u2019re getting ahead of time, too. These can be uncomfortable conversations, but hopefully having the discussion ahead of time will preclude them from contesting your will.<\/p>\n\n
End-of-Life Financial Management<\/h2>\n
Advance Healthcare Preparations<\/h2>\n
Business Succession Planning<\/h2>\n
Selecting Beneficiaries<\/h2>\n
Avoiding Probate<\/h2>\n