Estate Planning

A recent survey by U.S. Trust found that “there is a gap between the importance the wealthy place on providing family security and what they are actually doing in terms of estate planning.”1 A majority of survey participants have an estate plan in place, but 39 percent indicate their plans are not comprehensive enough to properly manage distribution of their wealth. This may be because leaving a financial inheritance is less important for many of them than achieving other goals, including:

  • Financial security for self and family
  • Financial freedom
  • Travel
  • Quality relationships with family and friends

The survey respondents also had concerns about their heirs’ ability to handle the responsibilities of wealth. Just over one-half had not fully disclosed their wealth to their children and 15 percent had disclosed nothing at all. Some of the fears preventing disclosure included the effect the knowledge might have on their children’s lives and concerns that family money could be wasted.

Make sure estate plan does it all

If one of your priorities is providing ongoing financial security for your spouse and family members, then it’s important that estate planning do more than address tax issues. A comprehensive estate plan should include the priorities shown in the pyramid.

Financial security

Once there is comfort with financial security, it is necessary to establish goals for the distribution of wealth.  Things to consider include:

  • Who will receive the assets?
  • How much will each person/entity receive?
  • How will the wealth be distributed?

Estate protection

Safeguarding your estate comes next. Your estate may need protection from:

  • Creditors or lawsuits
  • Former family members
  • Disgruntled or irresponsible family members
Management continuity

The next consideration is continuity of management and caretaking for the estate. Is a trust or another entity necessary?  It can be a good idea to consider the benefits of:

  • Revocable and irrevocable trusts
  • Life insurance trusts
  • Charitable trusts


Finally, the potential tax burdens related to an estate should be addressed.

Everyone needs a legacy plan

Regardless of wealth, everyone needs a legacy plan. It is common for a person who is not concerned about taxes to simply not plan. This is a mistake. Even if your legacy plan consists of a simple Will and Power of Attorney documents, planning is necessary. Likewise, people who are concerned about taxes, and have engaged in estate tax planning, also need to consider other aspects of estate planning and the long-term effects of their legacies.

This information is not intended to be a substitute for specific individualized legal advice. We suggest that you discuss your specific situation with a qualified legal advisor.

1U.S. Trust, U.S. Trust Insights on Wealth and Worth™: Survey of High Net Worth and Ultra High Net Worth Americans, 2011 Highlights, p.6. The survey included 457 individuals with more than $3 million investable assets.