Inheritance Planning: A Guide for High-Net-Worth Heirs to Maximize the Legacy

If you are a high-net-worth individual, you require expert financial planning and guidance to ensure future security for yourself and your family. We get it – you probably don’t want to think about it. However, if you are in line to receiving a major inheritance, a proactive approach is fundamental to safeguarding your inherited wealth and ensuring it continues to grow. This is where you require the services of a financial advisor who can assist you with the different aspects of wealth management, including inheritance planning. It is important to understand that wealth management plans rely heavily on the expertise and experience of your advisors. Therefore, if you are ready to start with inheritance planning, we suggest you take your time to read our guide on choosing a financial advisor to make sure you choose the right services that meet your needs and help you achieve your goals.

STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION

 

7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning

 

The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.

Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.

You can also connect with our team at Pillar Wealth Management. We are a fiduciary advisory firm with decades of combined experience in wealth management. We specialize in helping investors and high-net-worth individuals with $5 million to $500 million in liquid investment assets. Our personal financial advisors specializing in inheritance planning can help you maximize your assets. The goal is to streamline the inheritance process, reduce taxes, and ultimately help you grow the value of your assets. Click here to contact the Pillar Wealth Management team to learn more about our services or arrange a free consultation.   

In this blog, we will discuss aspects of inheritance planning. We will discuss why you need inheritance planning, how to plan an inheritance, how to avoid inheritance tax on property, and what happens when you inherit money. Read on to have all your questions answered.

The Need for Inheritance Planning

The inheritance process is not as straightforward as you may have imagined. In fact, many people consider inheritance to be an imminent threat to wealth sustainability. It is because inherited wealth is volatile in the sense that it can easily vanish without proper financial strategies and proactive inheritance planning on the part of the heir. These beliefs are backed by research regarding generational wealth reveals that around 70% of families lose wealth in the second generation. The percentage further hikes up to 90% by the third generation.   

Many reasons may be attributed to the dip experienced in overall wealth following inheritance. Oftentimes, heirs have no clue regarding the value of inheritance and how to handle it. Plus, let’s not forget about other issues, such as unnecessary taxes and costly estate fees that may be experienced due to a lack of transparency about the wealth between parents and heirs.

However, these issues can be avoided through proper inheritance planning and open discussions between current owners and future heirs to set legacy goals in the presence of expert financial advisors specializing in inheritance planning. Inheritance planning starts way before the inheritance is actually passed down to the heirs. This proactive approach prepares the heirs beforehand and lays out a roadmap to maximize the family legacy following inheritance. For more information on how to ensure successful inheritance, arrange a free consultation with Pillar Wealth Management inheritance planning experts to explore your options. 

How Do I Plan An Inheritance?

Now that you understand the role of inheritance planning in safeguarding family legacy, you may be wondering, “how do I plan an inheritance.” If you are in line to inherit from high or ultra-high-net-worth parents, it is advisable to take the time to plan ahead. We understand that inheritance is not always an easy topic to discuss.

Regardless, there is no way around it either. High-worth value individuals who want to maintain the accumulated wealth through generations understand the importance of inheritance planning. Read on to learn how to plan a high-net-worth inheritance plan.

Inheritance planning

1.    Start the Discussion

The discussion regarding inheritance planning may be initiated by the potential heir or the parent. Heirs may want to include your siblings and spouse in the discussion. Depending on your circumstances, you can make your children part of the dialog.

It is recommended to initiate this conversation during the life of the parents as they can be one of your biggest sources of guidance on how to manage the wealth once the wall falls, and you are responsible for not only wealth sustainability but also growth.  

2.    Discuss Goals

The aim of initiating the discussion regarding inheritance planning is to get a general idea regarding the goals and plans of different members who will play a defining role in inheritance management. One way to start is to ask everyone to list down their personal goals, dreams, and desires, as well as their aspirations regarding the family legacy.

The diverse list of answers you get might surprise you. These ideas usually include everything from traveling the world or funding a cause to launching new products, investing in real estate, commissioning entertainment productions, and much more. These plans may or may not align with your goals. Regardless, this discussion will turn out to be of integral importance in setting your wealth management goals.

To learn more about setting goals, we strongly recommend you read our book, “The Art of Protecting Ultra-High-Net-Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million.”     

3.    Work the Details with Professionals

Once you understand where you and everyone else stand on the idea of inheritance planning, it’s time to assemble a team of professionals. Keep in mind that the right team will include more than your personal financial advisors. You don’t want to safeguard your future just financially but also legally. Therefore, it is recommended to call in the estate planning lawyer, a tax attorney, an experienced wealth manager, and other professionals, such as accountants, depending on your personal needs.

For effective results, you need to make sure you work with professionals having experience in tackling ultra-high-net-worth scenarios. They’ll know the right questions to ask to help you be prepared and ultimately get where you envision yourself in the future. They will also highlight and suggest the right measures for any legal or financial complications that may arise in the future. Finally, with years of experience in the field, your team of high-profile professionals can also suggest new ideas and opportunities that you may have missed out on.  

4.    Make Expenditure & Investment Plans

Another thing that you want to do is get your spending plans straight. There is nothing wrong with using your inheritance to fulfill your goals and dreams. However, many times, high-net-worth individuals tend to go overboard, ending up in hot waters.

The biggest reason for this rather common occurrence is that heirs may not realize the value of their money and make wrong monetary decisions that may cause long-term damage to their finances. Therefore, a better approach is to hash out an expenditure plan. Your goal must be to strike a balance between spending and investing to ensure your wealth is sustainable.

This brings us to the topic of personal investment plans. You can learn about investments in-depth in our exclusive guide on the 5 critical shifts that impact investment portfolios.

Your inheritance investment plans are the key to long-term financial security. However, keep in mind that the process requires substantial effort. For one, you can’t just move your inherited fortune into your existing bank accounts. You must work closely with your tax attorney and wealth manager to account for tax implications. From when to where you want to put the money, everything requires immaculate planning on your end if you want to attain maximum value through your inheritance. You can learn more about

The key goal here is long-term growth and raised value. Keep in mind that you only get one shot at making the right expenditure and investment plans, which means there is no room for error. Therefore, work with only high-profile wealth managers who understand how ultra-high-net-worth works. Pillar Wealth Management has the right team to help you sketch out high effective plans. Remember, your investment portfolio plays a critical role in determining your future. You can learn more about it in our exclusive guide on how ultra-high net value individuals can improve their performance portfolio.  

5.    Work through the Complications  

Families have unique dynamics that need to be considered during inheritance planning. Events like prior divorces in the family, potential heirs who fell out of favor, and the role of other relatives are only some things that may lead to certain complications if not addressed carefully.

However, it must be mentioned that not all factors that lead to complex scenarios, later on, tend to be negative. Positive instances, such as adoption or mega business success for one of the heirs, may also require separate attention.

These factors need to be ironed out immaculately to streamline the inheritance process and ensure wealth growth following the inheritance. An impartial team of experts with no personal involvement in the family can help you analyze matters objectively, enabling you to make better wealth management decisions. Click here to connect with our wealth managers to book a free initial consultation to discuss details related to family complications.

How Do I Avoid Inheritance Tax On My Property?

This is an important question that you must be asking if you are looking at an ultra-high-net-worth inheritance in your future. Inheritance tax (IHT) can take a toll on your inheritance money if not managed properly. This calls for inheritance tax planning, which can be defined as a way of ensuring maximum wealth is passed down to those nearest and dearest to the descendant. Inheritance tax on a property can be significantly reduced. Take a look at how to keep your inheritance money from being swallowed up by tax.  

Consider Putting Assets Into a Trust: If you are expecting an inheritance from your parents or relatives, suggest they put the assets into a trust. It is generally a good idea as it allows the assets to be passed down to the beneficiaries without probate and associated expenses. However, keep in mind that putting the assets into a joint name with a child may actually increase the taxes, particularly when the child decides to sell the assets.   

Donate to a Charitable Organization: It seems counter-intuitive on the surface. However, giving away some portion of the inheritance can potentially offset taxable gains and help you save significant wealth down the line. Furthermore, it allows you to support a cause of your choice to make the world a better place for everyone.

Be Generous with Gifts: Donating to charitable organizations is not the only way to reduce the size of the estate. Another way is to give annual gifts to your beneficiaries. Parents can give away gifts within a certain amount to each beneficiary without giving gift taxes. However, it requires you to plan the curate the inheritance plan early on to ensure parents can take appropriate actions. It is advisable to consult with your estate planning lawyer or other concerned professionals to ensure you stay up to date with the estate law tax regarding gift taxes and otherwise.  

Conclusion: What Happens When You Inherit Money?

What happens when you inherit money is on you. You can do nothing and let it sit. You can spend it and witness it squander. Or you can start making the right plans today to ensure you not only sustain the wealth but also grow it over time. Pillar Wealth Management can help you attain your goals and also avoid unnecessary inheritance taxes.

If you need help with inheritance planning or money management, our high-profile managers with relevant experience and expertise ensure seamless inheritance transition. If you are a high-net-worth inheritor, start inheritance planning today for a secured financial tomorrow. Click here to connect with our wealth managers today! 

Authors

To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.

You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.

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