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The Importance of Estate Planning for High-Net-Worth Individuals

estate planning when you are high net worth

Estate planning is a critical aspect of an overall financial plan, especially for high-net-worth (HNW) individuals and families. With substantial wealth and complex financial circumstances, HNW estate planning is necessarily much more extensive.

If you are an HNW individual, belong to an HNW family, or aspire to become an HNW in the future, you should prioritize estate planning.

Why an Estate Plan is Important

Estate planning is a powerful tool for the management and preservation of your wealth. It establishes processes that cater to the future needs of your heirs and ensures your assets are distributed according to your wishes.

Estate Planning is Even More Important for HNW Individuals

While everyone can benefit from a properly structured estate plan, it is even more important for those with higher levels of wealth. For HNW individuals an estate plan often involves much more complex issues than that of the typical estate plan.

Estate planning for HNW individuals may involve wealth that has spanned multiple generations. There may already be previous wealth transition strategies in place that need to be updated.

Your estate plan may need to provide for successive generations beyond your immediate children and include business succession, multiple residence transfer, tax strategies, trust and insurance structures, as well as legacy and philanthropic assurances.

You should initiate the estate planning process as early as possible to take advantage of tax minimization and ensure a smooth transition of wealth to your beneficiaries as well as establish your philanthropic legacy.

Specific Estate Planning Concerns for HNW Individuals

Beneficiary Conflict Minimization

Estate planning is an emotional process. Clear communication amongst all concerned parties is crucial for ensuring smooth intergenerational wealth transfer. A well-designed estate plan will significantly reduce any confusion and conflict on the transfer of assets to your beneficiaries, especially if your heirs are included in the planning process.

Privacy and Creditor Risk Protection

By using a trust structure your estate can avoid the prolonged time, costs, and disputes resulting from probate proceedings. A trust structure can also protect your estate assets from creditors and lawsuits.

Business Succession Planning

Your estate plan should specify who will own, control, and manage a continuing family business, or specify that the business should be sold to liquidate assets within the estate. You should discuss this with your heirs as early as possible to determine whether any are interested in and capable of overseeing your family business.

If not all of your beneficiaries are to be included in the business succession plan, your estate plan may need to include provisions to equalize asset transfer.

Tax Minimization

There are many strategies that can be established within your estate plan to minimize taxes on your estate. Appropriate trust structures can help minimize current taxes on your assets as well as on transfer to your beneficiaries. Life insurance strategies can also be used to minimize your taxes today and benefit your heirs and chosen charities.

Preservation and Growth of Assets

In order to maximize your estate for the benefit of your heirs and chosen charities, your estate plan should include provisions for the preservation and growth of your assets as you build your wealth. This includes a considered plan for the management of your investment portfolio.

Philanthropic Legacy

Charitable giving not only fulfills your philanthropic wishes, but can also provide significant tax savings for your estate. Establishing a charitable foundation or charitable trust that may also include life insurance strategies can ensure your philanthropic legacy carries on long after your passing.

Build Your Wealth with Bloom

For HNW individuals, estate planning requires a highly customized strategy to manage, preserve, and transfer wealth effectively while addressing legacy desires. HNW individuals should benefit from the comprehensive services of an experienced estate planning professional. The sooner you have an estate plan in place the more secure you and your beneficiaries will be.

A part of estate planning is to ensure that your investments are well taken care of and will continue to build a legacy for your beneficiaries. For over 38 years Bloom Investment Counsel has provided actively managed, customized Canadian and U.S. dividend-paying portfoliosfor wealthy individuals, family offices, foundations, corporations, institutions, and trusts. At Bloom, we are pleased to partner with your other trusted professionals such as estate planners to build a customized portfolio best suited to your needs to protect, preserve, and build your wealth. For more information, call us at +1-416-861-9941 or email us at

This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.

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