The number of ultra-wealthy individuals, or individuals with a net worth greater than $30 million, is growing rapidly around the world.
In fact, the number of ultra-high-net-worth individuals grew from 6,340 to 193,490 last year and there is no sign of stopping. By 2027, the worldwide number of ultra-high-net-worth individuals is expected to grow 43%.
While estate planning is important for everyone, it is especially important for families and individuals with high-net-worth and ultra-high-net-worth.
Estate planning is one of the most valuable gifts you can provide to yourself and your family, as it brings a multitude of benefits including security, peace of mind, and a high quality of life.
A professionally prepared estate plan will guard assets against a myriad of dangers and ensure they are properly and efficiently passed on to the intended heirs. In addition, it will ensure that your wealth continues to grow while you enjoy the quality of life for which you have worked so hard.
When planning your estate, it is critical that you take all of the necessary steps to do it correctly. However, there are 4 common mistakes that many high-net-worth families and individuals make, when it comes to planning their estate.
- Outdated Estates
Proactive families and individuals may have already taken the steps necessary to protect their wealth and family by creating an estate plan. The problem is that many people don’t realize that they should review their estate once a year or whenever a major life change occurs. Marriage, divorce, birth, death, legislative changes, and many other events have a large impact on your estate. By remembering to update your estate plan, you can maximize protection and minimize liabilities on an ongoing basis.
- Independent Advisors
Taking a more holistic approach to estate planning ensures that every aspect of your estate plan works together to optimize your wealth and minimize tax.
However, this is often not the case with many high-worth individuals. Often, advisors work independently of one another and while these advisors are highly capable, the lack of interaction creates additional estate planning complexity, and can result in a non-cohesive plan.
Working with a team of estate planning professionals who work together to better understand your unique situation can ensure that your estate plan is the perfect solution for your specific needs.
- Under Utilizing Trusts
Trusts have existed in Canada for some time but are a relatively new concept for some individuals.
Trust Planning is an effective and viable alternative to more traditional methods of transferring wealth to loved ones. When applied under the right conditions, trusts can offer remarkable benefits that are not provided by a traditional will, including taxation, matrimonial, and credit protection.
- Not Involving Family Members Early On
Traditionally, estate planning has been associated with death planning. However, modern estate planning takes a more positive approach, focusing on maintaining a high quality of life and ensuring that you enjoy every moment you can, while protecting your family and wealth for many generations.
As part of this modern approach, involving your family early on is imperative. It ensures that your family better understands your wishes and is able to care for you, as you see fit, if you ever lose capacity. It also increases peace-of-mind and helps others better understand why you are making the decisions you have made.
At MacMillan Estate Planning, we provide you with a comprehensive estate plan that ensures every aspect of your life has been considered. Our team of unbiased trust and estate practitioners, lawyers, accountants, and specialized advisors will consider your specific circumstances and will craft a personalized plan that considers family dynamics, tax position, risk tolerance and long term objectives.
To meet with us today about your estate planning needs, register for a complimentary consultation! We look forward to working with you.
