The CNBC Millionaire Survey has found that 38 percent of 750 millionaires surveyed have not consulted a financial expert to establish an estate plan. The poll conducted by Spectrem Group for CNBC revealed estate planning was the most prevalent among individuals with investable assets amounting to at least $5 million, with 68 percent having worked with a financial advisor.
Despite being business-savvy, wealthy Americans have demonstrated a reluctance toward thinking about estate planning. The lack of estate plans can be attributed in part to the constant changes in federal estate tax law, which has resulted in what estate planning attorney Michael Gilfix calls “estate-planning fatigue.”
A higher federal estate tax exemption of $5.43 million per person this year could be another reason high-net-worth families have placed a lesser priority on estate planning, holding the view that it is primarily a way to reduce estate taxes. There is more to estate planning, however.
When it comes to protecting and providing for loved ones when you are no longer around, estate planning is one of the most basic and critical steps a person can take. It provides control over what happens to your assets and how you will provide for your children, along with specific instructions about end-of-life wishes that will avoid unnecessary stress and fighting later on.
Inherited assets can be protected if a child endures divorce. Such assets can be protected from litigation, explains Gilfix.
Establishing a sound estate plan involves drafting documents such as wills and powers of attorney, as well as setting up living trusts and addressing property management. Without a plan, you risk leaving life’s important decisions in the hands of the courts and having the care of your children and their inheritance fall into the wrong hands.