Estate Planning Tips for High-Net-Worth Individuals and Families

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Key takeaways:

• Partner with experts: Work with experienced estate planning professionals to navigate complex tax laws and wealth transfer strategies.
• Reduce tax burdens: Use trusts, gifting strategies and charitable giving to minimize gift, estate, generation-skipping transfer (“GST”) and state inheritance taxes.
• Protect your legacy: Establish trusts and incapacity plans to safeguard assets and ensure continuity across generations.
• Review regularly: Work with your advisor to regularly review and update your estate plan to reflect life changes, tax law updates and evolving financial goals.

Laying the foundation for your legacy

Estate planning is about more than preparing for your future; it’s about shaping a legacy that reflects your values, protects your loved ones and ensures your wealth is transferred with intention.

For high-net-worth individuals, this requires a level of precision and foresight that accounts for complex tax implications, vital legal considerations and strategic wealth transfer opportunities.

What is estate planning and why is it important?

Estate planning is the process of organizing and structuring the administration and transfer of assets to ensure your wealth is preserved, protected and distributed according to your wishes. For high-net-worth and ultra-high-net-worth individuals, some of the benefits of estate planning include minimizing tax exposure, maintaining privacy and ensuring continuity across generations.

While many families delay planning, recent data suggests a shift in mindset. According to a 2025 report by Trust and Will, estate planning is gaining traction. The findings show that some 66% of households earning over $1 million have established a will.

To build upon this momentum, developing a thoughtful strategy is essential. Doing so involves evaluating key factors that influence long-term success and working closely with legal and financial advisors to tailor the plan to your unique needs. The following outlines some key considerations for high-net-worth individuals seeking to preserve and transfer their wealth effectively.

Essential estate planning tips

1. Work with estate planning professionals

Navigating the intricacies of high-net-worth and ultra-high-net-worth estate planning demands the expertise and insight of an experienced and trusted advisor. From choosing the right trustee to designing sophisticated wealth transfer mechanisms, expert guidance ensures your estate planning strategies reflect both your long-term goals and family values.

With a thorough understanding of advanced planning techniques and the complexities of today’s economic environment, estate planning professionals are uniquely positioned to help minimize tax exposure, safeguard privacy and facilitate a seamless transfer of wealth.

2. Minimize taxes

One area where expert guidance proves most valuable is minimizing gift, estate, generation-skipping transfer (GST) and state inheritance taxes. Consideration of capital gains taxes is also important. Knowing that taxes can have a significant impact on the amount of wealth that’s passed onto heirs, strategic planning that properly accounts for taxes is imperative to preserving a legacy.

There are several effective approaches to help reduce tax burdens and maximize the value of what’s passed down. From leveraging strategic tools like trusts to incorporating charitable giving, these tactics can be tailored to fit your unique financial goals and family structure.

Gift and estate taxes

Gift and estate taxes are federal levies imposed on the transfer of assets during life or at death. For high-net-worth individuals, exceeding exemption thresholds can result in significant tax liabilities.

By partnering with a strategic advisor to structure gifts efficiently, you can reduce tax burdens and ensure your wealth is passed on with intention.

Generation-skipping transfer taxes

A generation-skipping transfer tax is a federal tax that applies when assets are passed to grandchildren or other beneficiaries who are more than one generation below the donor. Understanding these types of transfers and their associated tax implications requires careful attention to timing, exemptions and beneficiary designations.

Without proper planning, generation-skipping transfers can trigger additional tax layers beyond standard estate taxes. Carefully structured trusts and available exemptions can help reduce their impact, allowing families to transfer wealth more effectively across generations.

Charitable giving

By incorporating charitable giving into your estate plan, you can reduce taxable estate value while supporting philanthropic initiatives that align with your values and vision.

Tools such as donor-advised funds, charitable lead annuity trusts and qualified charitable distributions offer flexibility, tax advantages and the ability to give back to your community or causes important to you. This approach can benefit your legacy while creating a meaningful impact that goes beyond you and your family.

3. Establish a trust

Trusts are foundational tools in estate planning, offering control, privacy and protection for your assets. All trusts fall into one of two categories: revocable trusts or irrevocable trusts. In the context of ultra-high-net-worth estate planning, selecting the right trust structure is critical.

Revocable trusts provide flexibility and control, allowing the grantor to modify or dissolve the trust as circumstances change. With that said, the estate tax benefits they offer are not immediate, as assets within the trust at the grantor’s death remain part of the taxable estate.

Irrevocable trusts require the grantor to relinquish control, but they can offer significant tax advantages and asset protection by removing assets from the taxable estate and safeguarding them if the beneficiary goes through a divorce, experiences financial difficulties or is not yet financially responsible.

Choosing between a revocable and an irrevocable trust depends on your financial goals, risk tolerance and desired level of flexibility. Working with an experienced estate professional and your advisory team can help to ensure your trust strategy aligns with your broader financial vision and legacy objectives.

4. Set up an incapacitation plan

An incapacitation plan is a critical component of comprehensive estate planning strategies for high-net-worth individuals. Incapacity planning involves documenting how financial, legal and healthcare decisions will be handled if you become unable to make them yourself.
 

Key elements to consider include:

• Appointing a financial agent under a durable power of attorney (POA)
• Appointing an agent for medical matters under a healthcare power of attorney (HCPOA)
• Appointing a Health Insurance Portability and Accountability Act (HIPAA) release agent to protect your health privacy
• Completing a living will (an advance directive) to spell out your wishes in the event of a catastrophic event or terminal illness that renders you unable to communicate effectively.
• Creating a revocable trust
• Where necessary, considering a guardianship for a loved one who is unable to handle their own affairs.
• By planning ahead, you safeguard your legacy, reduce stress for loved ones and maintain control over how your affairs are managed in situations where you may be incapacitated or otherwise unable to make decisions.

5. Avoid probate with a living trust

Creating a living trust is one of the most effective ways to bypass the often lengthy and costly probate process. By placing assets into a revocable trust during your lifetime, you ensure they are transferred directly to beneficiaries upon death without court involvement.

This strategy offers privacy, faster distribution and greater control, all of which are especially valuable in high-net-worth estate planning. For individuals with complex estates, a living trust helps to streamline asset transfer and can preserve family wealth with minimal disruption.

Even with a trust in place, understanding the estate settlement process is critical. Settlement involves administrative steps such as retitling assets, addressing tax obligations and other claims and coordinating with fiduciaries and advisors to ensure your plan is executed smoothly.

6. Review your estate plan regularly

Estate planning should be an ongoing process that evolves alongside your life, family and financial circumstances. For high-net-worth individuals, regular reviews ensure that your plan remains aligned with current laws, tax regulations and your personal circumstances and goals.

Major life events like marriage, divorce, births, deaths or significant shifts in wealth or business holdings may require updates to trusts, beneficiary designations or distribution strategies. By revisiting your estate plan periodically with a trusted advisor, you can preserve your legacy, minimize risk and ensure your intentions are clearly reflected in every detail.

In conclusion: building a legacy with purpose

Estate planning is a dynamic and deeply personal process, especially for high-net-worth and ultra-high-net-worth individuals seeking to preserve wealth across generations.

By partnering with trusted professionals and leveraging strategic estate planning strategies like trusts, staggered distributions, incapacity planning and more, families and individuals can build a legacy rooted in both financial security and thoughtful stewardship.

With careful planning and intentional guidance, your estate can reflect both your financial goals and personal values. For more information on effective estate planning strategies, contact your Fifth Third Private Bank Advisor.