Strategies for Creating an Estate Plan Tied to Your Net Worth

Strategies for Creating an Estate Plan Tied to Your Net Worth

Protecting your wealth is an important goal for ultra-high-net-worth individuals (UHNW). This is because the economy and world are unpredictable. Tax rates are rising, inflation is high, and investments can be volatile.

There are many ways to preserve and pass your wealth on to future generations. These include a comprehensive financial plan, investment diversification and insurance.


When advisors ask clients about their greatest assets, they often hear about their homes or investment portfolios. But a more important support for many affluent families is their income.

Insurance can help protect this asset. Depending on state laws, life insurance benefits can be off-limits to creditors, and policies can be structured in such a way as to exclude beneficiaries from claims against heirs’ estates.

Moreover, life insurance can replace donations to charitable vehicles like charitable remainder trusts (CRTs). This is known as a wealth replacement strategy.

Real Estate

While estate planning is a crucial part of any investment strategy, high-net-worth individuals face unique challenges that can be addressed with comprehensive asset protection strategies. These strategies can help shield their assets from creditor claims and other lawsuits and minimize estate taxes.

Placing them in trust is an important way to protect real estate assets. This can help avoid a costly probate process and allow for a faster property transfer to heirs. It can also reduce the amount of taxable capital gains when property is sold. It can take some significant legal knowledge to ensure real estate assets are properly protected under law, however, so it’s best to hire a Real Estate Lawyer to ensure everything is covered and considered.

Bank Accounts

One of the most basic safeguards you can take is deposit insurance on your bank accounts. The amount you can claim depends on state law, which you can find out by checking with your bank or brokerage firm.

Another approach is to set up a domestic asset protection trust, which shields assets from creditors after death. However, this type of trust “does not offer any creditor protection if you own your home or car, or have money in your checking or savings account,” the site notes.


A successful wealth preservation strategy can help protect your assets from various threats, including litigation. It may also include strategies to shield assets from future family divorces or creditor attacks.

Depending on your circumstances, you should focus on lower-volatility investments. These may include fixed-income investments and cash deposits. Investing in assets that protect against inflation can be helpful as well.

A financial advisor can help you build a wealth preservation strategy that includes these and more. SmartAsset’s free tool matches you with vetted financial advisors who can provide comprehensive advice to address your needs.

Retirement Accounts

In retirement, estate planning based on net worth, especially for high-net-worth individuals, must balance how much they save, invest and spend. They also need to plan for potential setbacks in their financial future, such as a job loss, market downturn or healthcare crisis.

Individual Retirement Accounts (IRAs) allow people to make pre-tax contributions and avoid paying taxes on their earnings until they withdraw them in retirement. The Roth IRA will enable higher-income people to make tax-free withdrawals, while SEP IRAs are available for self-employed individuals and small business owners.

Updating retirement account beneficiary designations to the proper trust can help protect accumulated wealth and ensure that it is passed on to heirs.


A trust is an important component of a high-net-worth estate plan. Depending on the type of trust, it can protect assets from creditors (by severing the connection between you and the support), protect beneficiaries from poor investment decisions or being taken advantage of by family or friends, reduce federal and state estate taxes, carry out charitable intent; and ensure multi-generational transfer of wealth.

An experienced financial professional like those from Fort Worth Estate Planning law firm Baker-Heath PLLC can help you determine whether a trust is part of your estate planning and how to structure it properly. A free tool matches you with qualified advisors in your area; interview your advisor matches at no cost to decide who is right for you.

Estate Planning

As you approach retirement age, your estate plan can help protect your assets from frivolous lawsuits and financial predators. It can also help you avoid or minimize tax obligations.

Having an estate plan can reduce the amount of federal and state inheritance taxes your beneficiaries may have to pay. It can also decrease the income tax your heirs might have to spend on certain investments and the death benefits from life insurance.

An experienced financial professional can help you implement asset protection strategies that meet your needs and goals. Reviewing your estate plans periodically is important, especially after major life events.

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