From an estate planning perspective, as a business executive, you’re different than the average person. You probably have higher earnings, a larger net worth than the average person, equity in different business ventures, and complex benefits plans. So why would you choose a generic estate plan that’s designed for people with very predictable assets?
What you need is an estate plan that’s nuanced and targeted – one that addresses the unique aspects of your family, your assets, your life, and your legacy. Before you schedule a meeting with an estate planning attorney, take a few moments to understand the weight and magnitude of this process. It’ll give you a better idea of how to proceed.
You can tell I’ve been watching a fair bit of Spiderman with my boy over the last couple months when I say, with great power comes great responsibility. Call it cliché, but this statement explains why estate planning is so important for corporate executives. You likely have more influence and a higher degree of accountability, which requires a more detailed approach to instruction-setting across your assets, responsibilities and legacy.
Not all of these situational factors or descriptors will apply to you, but here are some of the commonalities between corporate executives that make their situation unique (from an estate planning perspective):
Again, you might not satisfy each of these criteria, but you almost certainly share some of these commonalities with other corporate executives. And in that case, you can’t afford to have a generic, copy-and-pasted estate plan. You need something that’s specific to your situation.
More than just your family and loved ones count on you. The following estate planning tips will help you think about estate planning through the appropriate lens:
Every estate plan starts and ends with goals. The question is, what are your primary objectives?
In most cases, corporate executives and other high net worth individuals want to accomplish four specific goals with their estate plans:
These are often viewed as the pillars of the estate plan. Every decision and document will help build upon these objectives so that assets are protected and there’s greater peace of mind.
Taxes represent one of the biggest threats to high net worth individuals. If you don’t plan for how you’ll mitigate and absorb the impact of taxes, they can easily eat up a significant portion of your wealth and assets after you’ve passed away.
The good news is there are plenty of techniques and strategies you can use to reduce estate taxes and preserve your estate. But if you aren’t careful, the sheer volume of choices will paralyze you. A proper estate plan process carefully works through these options and filters out the ones that won’t work for you.
For high net worth individuals and corporate executives, insurance policies often serve as safeguards against high taxes. They can be used to offset taxes and/or pass along assets that aren’t subject to estate tax. However, they have to be structured and dispersed in the appropriate manner.
If life insurance funds are owned by you or made payable to your estate, they’ll end up being subject to any estate taxes that kick in. An estate plan should analyze this aspect of your situation and determine whether a trust or other legal entity is needed to protect insurance proceeds from going straight to the US Treasury.
Naming a fiduciary for your estate plan is more than a formality or technicality. Your fiduciary is the person who will step into your shoes and oversee/carry out all of the specific steps and wishes that you have for your estate. This may include selling property, managing lifetime (multi-generational) trusts, paying creditors, distributing assets, meeting with loved ones, etc.
Your fiduciary should be someone who is both capable and trustworthy. This may or may not be someone in your family. It could be a colleague, business partner, or close friend. It might even be a corporate fiduciary depending on the complexity of your instructions. The key is to select someone who’s skillset is tailored to the set of instructions and the goals of the plan.
Consider drafting a legacy letter. Also known as an ethical will, this personal document communicates your knowledge, values, life experiences, hopes, and dreams to your surviving loved ones. It’s not a legally binding document, but rather an intimate document that you can pass along and share with your heirs.
There are estate planning attorneys who treat estate planning as a monetizable product. Then there are estate planning attorneys who are passionate about helping others forge a proactive plan for their assets and legacy.
There are estate planning attorneys who use two or three generic approaches and attempt to fit each client into one of these rigid forms. Then there are estate planning attorneys who get to know their clients and tailor unique strategies to them based on the information and details that are accumulated during this discovery process.
I’m not exactly your average estate planning attorney. I believe an estate is more than a collection of documents. Planning begins and ends with a conversation. It’s an intentional and loving act designed to preserve a family’s wealth and story.
If you’re a corporate executive looking to gain some clarity around what it looks like to develop a strategic and meaningful estate plan to protect your family’s assets and preserve your legacy, please don’t hesitate to reach out. I’m happy to schedule a consultation to get to know you better.
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