Family Wealth and Legacy Estate Planning – High Net Worth Individuals

First off, what is family wealth and legacy estate planning? Family wealth and legacy planning is a financial strategy that prepares people to bequeath their assets and estate after they die. This kind of planning is usually planned with a financial advisor. After a person passes away, their wealth and possessions are passed on to their next of kin or beloved as indicated in their will. When choosing the family member or professional trustee  to carry out the provisions of your trust, choose responsibly to ensure the management of investment, tax, legal, and interpersonal issues are conducted to the best of their ability.

As a high net worth individual (HNWI), insurance is crucial to protecting and ensuring the proper distribution of assets post death. If you don’t have a plan in place after your passing, its management might go against what you wanted once it is passed on to your heir.

There are certain types of insurance policies that can protect your wealth in the event legal challenges arise and/or are unnamed. Life insurance can help minimize estate, gift and income taxes when your assets are transferred to your beneficiaries while providing a lump sum of cash to your beneficiaries when you die.

The two main benefits of utilizing life insurance are to ensure liquidity and financial leverage. Life insurance can help ensure the continuing of business after they are gone by converting life insurance into enough liquidity to enable family members to maintain control or actually purchase the company.

In addition, the death benefit from these policies can be used to settle the tax liabilities that would have been left behind. HNWIs often underestimate the amount of debt they have which leads to bills piling up and leaving the next generation of heirs broke. HNWI’s are often involved heavily in business and any business debts left unpaid can be salvaged and provide the coverage your family needs

For your family themselves, life insurance allows them the ability to continue on in the lifestyle that they had prior to the HNWI’s passing. One study found that 90% of inherited wealth has completely vanished by the third generation. To ensure your family gets to live in comfort and get the education and opportunities you desire for generations to come, it is important to save and create a life insurance plan with your assets.

When planning your legacy, as an HNWI it’s important to have as many options as possible and to know which life insurance is best for you. It is a protection for your now family and future family, estate, business, and assets in any worst-case scenario.  Whether it’s cash value life insurance or term life insurance that is best for you, high net worth individuals should work with larger life insurance companies that offer higher death benefits.

Working with insurance companies like Daigle and Travers can help guide high net worth individuals to find the life insurance that best fits their needs now and in the future.