High Net Worth Estate Planning at Braverman Law Group, LLC

High Net Worth Estate Planning: Tailored Strategies for Complex Estates

Planning for high net worth (HNW) individuals, couples, and families requires a sophisticated approach to achieving goals like protecting assets, optimizing tax strategies, ensuring long-term financial security for heirs. We believe it’s important to achieve our clients’ spoken goals inside the framework of an estate plan that is meaningful and satisfying. Unlike standard estate planning, which may involve straightforward wills and basic trusts, HNW estate planning encompasses a variety of specialized strategies to manage substantial wealth effectively. The attorneys at Braverman Law Group understand the nuances of HNW strategies, essential in navigating this complex area of law.

Why HNW Planning is Different

High net worth planning differs from traditional estate planning in scope, complexity, and the tools used to achieve its goals. The stakes are higher and the solutions more complex due to the types of assets involved, such as multiple real estate properties, significant stock portfolios, international assets, and business ownership. The potential for substantial tax liabilities and the need for privacy and control demand an experienced and advanced approach.

Given the complexities, HNW estates require estate planning attorneys who are not only familiar with standard estate planning techniques but are also skilled in more sophisticated strategies. At Braverman Law Group, we keep abreast of the ever-changing tax laws and understand how to leverage legal frameworks to achieve our clients’ unique goals.

Some Useful Strategies in HNW Estate Planning

1. Irrevocable Life Insurance Trusts (ILITs)
An Irrevocable Life Insurance Trust (ILIT) is a popular tool in HNW planning. It allows the life insurance policy proceeds to be excluded from the taxable estate, providing liquidity to heirs to pay estate taxes, debts, and other expenses without selling assets. The ILIT owns the insurance policy, pays the premiums, and administers the proceeds according to the trust terms, ensuring that the benefits are used exactly as intended.

2. Valuation Adjustments
Valuation adjustments, such as discounts for lack of marketability and control, can be significant in HNW planning. These adjustments can reduce the value of an asset for tax purposes, reducing or eliminating the estate tax. For example, by transferring just a small portion of business interests to the heirs and restricting transfer of ownership, owners can apply lack of control and marketability discounts to the entire business, resulting in considerable tax savings.

3. Asset Protection LLCs and Trusts
For HNW individuals, protecting assets from creditors, lawsuits, and other risks is paramount. Forming an Asset Protection LLC can help shield assets by segregating them into separate legal entities. Moreover, Domestic Asset Protection Trusts (DAPT) formed with other states’ laws offer a robust protective structure by providing a legal barrier between creditors and the trust’s assets, assuming compliance with specific statutory requirements.

4. Spousal Lifetime Access Trusts (SLATs)
A Spousal Lifetime Access Trust (SLAT) allows one spouse to create an irrevocable trust for the benefit of the other spouse, providing financial security and maintaining access to the trust’s assets during the beneficiary spouse’s lifetime. This strategy is particularly effective in using the gift tax exemption while benefiting from the trust assets if needed. While care must be taken, it is possible for spouses to create SLATs for each other.

5. Charitable Trusts
Charitable trusts, including Charitable Lead Trusts (CLTs) and Charitable Remainder Trusts (CRTs), serve dual purposes—they support philanthropic goals and provide tax benefits. For example, a CRT lets you convert a highly appreciated asset into lifetime income, reduces your taxable income upon funding, and benefits a charity at the end of the trust term. This strategy is not only philanthropic but also smart tax planning.

The Role of an Experienced Attorney

HNW estate planning is intricate and demands an attorney who not only understands the legal strategies available but also appreciates the nuances of high-stakes asset management. This level of planning requires more than legal knowledge—it demands a strategic approach that aligns with both immediate and long-term financial goals. An attorney specializing in HNW estate planning can provide the guidance necessary to ensure that your estate is protected, compliant, and optimized for your heirs.

An experienced attorney also understands how to work effectively with other players in the family’s financial and legal advisory team.

Conclusion

High net worth estate planning is not a one-size-fits-all process. Each strategy must be carefully considered and tailored to individual needs and goals. With the right attorney, HNW individuals can navigate the complexities of estate planning with confidence, ensuring that their wealth is preserved and passed on according to their wishes. Whether it’s through leveraging tax strategies, protecting assets, or contributing to charitable causes, the right estate planning approach can make a significant difference in the legacy you leave behind.