High-net-worth individuals take different approaches to investing, according to a recent Wall Street Journal article, “Who are High-Net-Worth Individuals and How Do They Manage Their Wealth?” What really differentiates them is their ability to invest in private investments not available to the public, like hedge funds, angel investments, private equity funds and venture capital funds. They are more likely to invest in assets beyond the common options of stocks, bonds, savings accounts, exchange-traded funds and CDs. Beck, Lenox & Stolzer Estate Planning and Elder Law, LLC offers this brief overview of estate planning for high-net-worth families.
A high-net-worth individual needs estate and legacy planning to ensure that their wealth is passed on to the next generation. Without a strong estate plan, their wealth could easily go to someone they don’t want or to the state.
Estate and legacy planning ensures that assets are distributed correctly without conflict, protects family assets and minimizes tax liabilities.
High-net-worth individuals need strategic estate planning, typically coordinated with their CPA and financial adviser. Their needs are complex, including managing a growing, diverse asset base, business continuity, transferring wealth across multiple generations, keeping information confidential and avoiding taxation.
Strategies used by high-net-worth individuals to achieve estate planning goals often share many of the same tools but are more complex.
Trusts: Trusts are used to protect assets from creditors, pass wealth without probate and maintain privacy. Determining which type of trust to use depends on the individual situation. Irrevocable trusts, generation-skipping trusts, dynasty trusts and domestic asset protection trusts are among the options. For “regular” people, a Medicaid Asset Protection Trust (MAPT) is a valuable tool for protecting assets when long-term care is needed.
Strategic gifting. The annual gift tax exclusion and lifetime gift tax exemptions allow individuals to gift up to $19,000 to as many people as they wish. The lifetime exemption is $15 million for single filers and $30 million for married couples filing jointly. On a smaller scale, gifting allows parents or grandparents to see their heirs benefit from their generosity.
Charitable donations. Gifting to charities allows wealthy individuals to make meaningful contributions to organizations to advance their values. Creating a legacy of philanthropy is often a hallmark of wealthy families. However, most Americans support organizations through donations or volunteering.
Business succession planning. Business owners need to determine who will take over the business upon retirement or death. Without a succession plan, businesses and family wealth are vulnerable.
High-net-worth individuals meet more frequently with estate-planning attorneys to protect their wealth as tax laws change. Managing a large, diverse portfolio, minimizing taxes, maintaining privacy and protecting the family from internal and external challenges requires additional care. The extra effort and time needed are well worth the peace of mind.
If you are in need of an experienced estate planning and elder law attorney, contact us for assistance. A simple phone consultation can get you started.
Reference: The Wall Street Journal (Jan. 9, 2026) “Who are High-Net-Worth Individuals and How Do They Manage Their Wealth?”
