Estate Plan like the Rich and Famous

The business of estate planning is ever-evolving, and it is often the more wealthy individuals that keep up to date with the latest approaches and strategies. But even if you don’t have millions of dollars in your estate, you can benefit from the same strategies the very wealthy use to plan for the future. 

Here are a couple of estate planning tips I recommend to clients, no matter the size of their estate: 

Surround yourself with a cooperative team of experts. Planning for the future while managing life in the present is complicated, and wealthy individuals often lean on experts in a variety of fields to keep the train moving. From legal expertise to tax advisors to estate planning attorneys, there are many people who play a role in planning for your financial future no matter what your income or assets. 

When all of these professionals work together collaboratively, it enhances and optimizes the benefits you receive from each. As you look for professional advisors in each of these areas, be sure to find people who are interested in working with the other advisors in your world. This way, they have a full picture of your assets, lifestyle, and the work you are doing with other advisors and can use that knowledge to ensure you get the services you need. 

Update your estate plan whenever you experience a significant life change. My wealthy clients know that a change in their financial, personal, or professional life means they need to give me a call and update their estate plan. Even if you do not have a ton of wealth, life changes like marriage or divorce, a new baby, or making a large purchase like a home are all indicators that your plan needs to be updated. 

The nature of estate plans is just that: planning for what will happen to your estate when something happens that you cannot plan for. That’s why it’s important to ensure your plan reflects your assets, needs, and desires as they are now, not as they were when you first created the plan.  

Make trusts the bedrock of your estate plan. Estate planning is not one-size-fits-all. Every estate is different just like every person is different, and there are a variety of types of trusts the wealthy use to ensure their estate plan reflects their values and desires. 

A good example is an IRA trust (also known as an IRA inheritor’s trust, and IRA living trust, or a standalone retirement trust). Perhaps you’d prefer to pass the value of this account on to several beneficiaries; an IRA trust allows you to create subtrusts for the benefit of each of several beneficiaries. Or, you may prefer your beneficiary not receive the entire lump sum all at once. If you have put money into a retirement account, an IRA trust allows you to lay out specific instructions for what happens to that asset after you pass away. 

A charitable trust is another specialization to an estate plan that depends specifically on your life and values. By setting up a charitable trust, you can earmark a portion of your assets to benefit a charitable institution that is important to you. 

Depending on the makeup of your family, you may explore the idea of a special needs trust, an educational trust, or another strategy for beneficiaries with specific needs.  

Trusts also have the added benefit of helping your estate avoid the lengthy probate process and may even help save money in your estate by reducing court costs and estate taxes in certain situations. There are many different types of trusts and bringing in an estate planning expert will help ensure you find the right combination of strategies to protect your estate for the future. 

We all care deeply about creating a secure and prosperous future for our loved ones. By adopting a few simple strategies, you can optimize your estate plan just like the wealthiest clients.