Help wealthy clients overcome 4 estate mistakes

By Staff | June 4, 2013 | Last updated on June 4, 2013
2 min read

Almost half of high net worth families fall short in estate planning, say advisors at Nicola Wealth Management.

In fact, many affluent investors avoid the subject because it touches on uncomfortable issues, including mortality and making sure loved ones are taken care of.

Read: Appointing guardians for adults

“Whether it’s indifference, outdated advice, or a combination of both, one thing is common among many high net worth individuals: they face a variety of wealth-related issues that require ongoing and updated professional advice, and they aren’t getting it,” says Nicola Wealth Management’s president David Sung.

Here’s how to help wealthy families over five estate planning mistakes.

1. Keeping it up-to-date: Many clients don’t realize they need to review their wills at least every five years or whenever there’s a major life change in their family with themselves or children. These life changes include: marriage, divorce, birth, death, and a major purchase or sale. Help clients make the necessary changes as their life circumstances change.

Read: Financial planning includes death 2. The plan: Some affluent clients focus solely on how much money to give and to whom. But an effective estate plan for these clients includes: a will, holding company, family trust planning, insurance, private business succession planning (if self-employed), wealth transfer strategies, tax reduction advice, and planned giving strategies.

Read: Move assets out of estates before death 3. Testamentary trusts: These offer opportunities for tax savings. But even the most sophisticated investor may not fully understand the complex and time-consuming demands placed on a trustee, who is charged with carrying out the directives of the trust. Responsibilities can include investing trust assets, filing tax returns, and distributing trust assets to beneficiaries.

“Investors prefer asking a family member to carry out their wishes,” says Sung. “Unfortunately, [they’re] not always competent to carry out the duties, and their decisions can be swayed by family dynamics.”

Read: Avoid estate legislation

Instead, suggest the client deems someone who isn’t related to him.

4. Communication: With most families, there is a lack of communication with potential heirs. This can wreak havoc later when it’s time to divide and allocate assets. Communicating with and involving family members early reduces the chances of survivors arguing with each other over what they thought your client wanted versus what he told them he wanted. staff


The staff of have been covering news for financial advisors since 1998.