Estate planning for high-net worth individuals involves many considerations beyond distributing your assets. Estate planning is often about leaving a legacy, planning for tax efficiency and ensuring your last wishes are understood by the next generation. By employing advanced techniques such as trusts, gifting strategies, and succession planning, you can help ensure that your assets are efficiently passed on according to your wishes.
1. Trusts
Trusts are powerful tools in estate planning that offer flexibility and control over how your assets are distributed. Here are some types of trusts to consider:
- Revocable Living Trusts: Allow you to retain control over your assets during your lifetime. They can be altered or revoked during your lifetime, help avoid probate and offer a well-planned transition of assets to your heirs.
- Irrevocable Trusts: Once established, these cannot be modified or revoked without the consent of the beneficiaries. They can be useful for shifting assets outside of your estate to potentially minimize estate taxes and help protect assets from creditors.
- Charitable Trusts: These allow you to support charitable causes while providing income and tax benefits to you and your estate. A Charitable Remainder Trust (CRT) enables you to receive income from the trust during your lifetime, with the remaining assets going to charity upon your death.
- Depending on the goals for your estate, other trusts may be utilized alongside the above trusts to target specific objectives such as a Spousal Lifetime Access Trust (SLAT), Qualified Personal Residence Trust (QPRT), Intentionally Defective Grantor Trust (IDGT), etc.
2. Gifting Strategies
Gifting is an effective way to transfer wealth while reducing your taxable estate. Consider these strategies:
- Annual Exclusion Gifts: You can gift a certain amount each year to as many individuals as you like without incurring gift tax. For 2025, this amount is $19,000 per recipient.
- 529 College Savings Plans: Contributing to a 529 plan for your children or grandchildren not only helps with future education expenses but also qualifies for annual exclusion gifts. You also have the option to “super-fund” a 529 plan gifting up to 5 years’ worth of the annual exclusion gift amount in one year creating a larger gift in the first year with no additional contributions made in the subsequent four years.
- Lifetime Exemption: Utilize your lifetime gift tax exemption, which allows you to gift a significant amount over your lifetime without incurring taxes. As of 2025, this exemption is just under $14 Million per person. It is important to note you will need to file a gift tax return for any gifts made in excess of the annual exclusion amount to record this gift against your lifetime exemption amount
3. Succession Planning
For those with significant wealth tied up in businesses or investments, succession planning is critical in creating a smooth transition of leadership and ownership:
- Business Succession Plans: Identify potential successors within your organization and create a roadmap for transitioning leadership. This can include training and mentoring the next generation or key employees. Decisions around future owners and succession planning can then be thoughtfully incorporated into your own estate planning to create ease of business transition upon passing.
- Buy-Sell Agreements: These legal contracts establish how ownership interests in a business will be transferred upon certain events, such as death or disability, to assist with business continuity and minimize disputes. Further planning around insurance and liquidity needs to fulfill the buy-sell agreement will need to be identified and proper ownership and beneficiaries named to execute on this plan.
4. Working with Professionals
Advanced estate planning can be complex, and enlisting the help of professionals is often necessary:
- Financial Advisor: They can assist with identifying your goals and priorities around your legacy and which estate planning tools and techniques may be helpful to achieve those goals. They can also help navigate the implementation of the estate plan and monitor for adjustments or changes due to life transitions or law changes in the future.
- Estate Planning Attorneys: They can help you navigate the intricacies of trusts, wills, and other legal documents to help ensure your plan is comprehensive and compliant with the law but also tailored to your specific goals and priorities within your estate.
- Tax Advisors: Their expertise can help optimize your estate plan to minimize taxes for both you and your heirs.
5. Regularly Reviewing Your Estate Plan
As your life circumstances change—such as marriage, divorce, birth of children or grandchildren, purchase or sale of a business or changes in financial status—so should your estate plan. Regularly reviewing and updating your plan is important to seeing that your plan reflects your current wishes and needs.
Estate planning for wealth is not just about distributing assets; it’s about being intentional in protecting your legacy. By taking the time to develop a comprehensive estate plan, and working with professionals to tailor a strategy that aligns with your values and goals, you can help safeguard your family’s financial future and leave a lasting legacy.
If you have any questions about your current estate plan, or would like to explore advanced techniques such as trusts, gifting strategies, and succession planning, please reach out to your JNBA Advisory Team.
Due to various factors, including changing market conditions and/or applicable laws, some of the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors.
Please see important disclosure information at jnba.com/disclosure
