You’ve worked hard to provide for yourself and your family and increase your financial security. As a high-net-worth individual, you have unique estate planning needs. Without advanced estate planning strategies, your hard-earned assets could be required to pay preventable federal and state taxes. High-net-worth individuals benefit from sophisticated estate planning strategies, such as personal residence trusts and irrevocable life insurance trusts.
The estate planning attorneys at Jones Gregg Creehan Gerace have extensive experience representing high-net-worth individuals in Pittsburgh and throughout Pennsylvania. Whether you want to create an estate plan or modify your state plan due to a recent change, we’re here to help. Our attorneys are skilled at finding ways to decrease our client’s tax liabilities, protect them from liability, and engage in incapacity planning. Contact Jones Gregg Creehan Gerace today to schedule an initial consultation with an estate planning lawyer.
Minimizing Estate Taxes Through High Net Worth Estate Planning
An important goal of creating a high-net-worth estate plan is to minimize estate taxes. When a person passes away and leaves significant assets to his or her loved ones, those assets can be subjected to multiple types of wealth transfer taxes. These taxes can include estate taxes, gift taxes, and generation-skipping taxes. Additionally, a federal tax can be imposed on a person’s estate.
Depending on your estate’s value, you could lose up to 40 percent of your non-exempt assets to estate taxes. Your beneficiaries could also have to pay expensive gift taxes. The attorneys at Jones Gregg Creehan Gerace are skilled at using sophisticated legal tools to help clients minimize their tax burdens.
Estate Planning for Potential Incapacitation
If you have a high-net-worth estate, you’ve likely spent years building your wealth and saving for the future. Becoming incapacitated unexpectedly could hurt your financial future significantly. For example, the cost could drain your assets if you need to stay in an assisted living facility for a few months. Planning for incapacitation can help you avoid spending significant money on assisted living care. For example, an attorney can help you create an irrevocable trust and become eligible for long-term care benefits.
We can also help you appoint a durable power of attorney along with a healthcare power of attorney. A durable power of attorney can make critical business and financial decisions if you cannot do so yourself. A healthcare power of attorney allows an appointed agent to make medical decisions for you. You can also set forth your wishes related to end-of-life care.
Business Succession Planning for High-Net-Worth Individuals
Many high-net-worth individuals own one or more businesses or commercial properties. When business owners become incapacitated, it can be difficult for their businesses to survive and thrive in their absence. An attorney can help you create a plan to allow your business to move forward if incapacitated. Doing so can help you protect your family’s interests. For example, if you own a family business and one or more family members are employed, a succession plan can protect your family member’s income and profitability. You can also help protect your business assets from future uncertainties and ensure that a transition plan is carried out seamlessly if incapacitated.
Qualified Personal Residence Trusts
A Qualified Personal Residence Trust (QPRT) allows high-net-worth individuals to protect their homes, which are often their most valuable assets. A QPRT trust allows a person to give his or her home or vacation home to another person at a significant discount. You can freeze the value of your home for estate taxes while continuing to live in your home. You can transfer your House’s title to the QPRT trust and designate beneficiaries, who are usually family members. you will reserve the right to live in the house for a specific number of years.
At the end of the specified time frame, the house and any appreciation and value since you created the trust will pass to your beneficiaries free of any additional estate or gift taxes. This type of trust can also protect your family home or vacation home from creditors because you will no longer legally own the property once you establish a trust.
Irrevocable Life Insurance Trusts
Another strategy involves creating an irrevocable life insurance trust to own your life insurance policy. When you transfer ownership of your life insurance policy to an irrevocable trust, the trust will prevent the proceeds from being included as part of your taxable estate. As a result, your beneficiaries can use the proceeds from the insurance policy as liquid assets to pay off debts, pay estate taxes, pay any final expenses, and provide income for surviving children or a surviving spouse. Once you’ve established the trust, you can use your annual gift tax exclusion to make cash gifts to the trust. Your beneficiaries will not have to pay gift taxes. The trustee can use the remaining gift to pay the life insurance policy premium.
As a high-net-worth individual, you may not want your estate and private information to be part of the public probate process. By utilizing different types of trusts, your beneficiaries can avoid the probate process and keep the terms of the trust agreement confidential. There are many different types of trust; each serves a different purpose, including asset protection and protection from potential creditors. An attorney can work with you to determine which type of trust best meets your goals.
Contact a Pittsburgh Estate Planning Attorney
If you are a business owner, own multiple real estate properties, or have other assets creating a high net worth, you’ll benefit from working with an experienced attorney. At Jones Gregg Creehan Gerace, our attorneys are dedicated to helping high-net-worth clients make informed decisions about their assets. We will work with you to implement a highly sophisticated, comprehensive estate plan that will allow you to protect your assets and ensure your beneficiaries receive as much of your estate as possible. Contact the Pittsburgh estate planning attorneys at Jones Gregg Creehan Gerace to schedule an initial case evaluation.