High Net Worth Planning In California
While achieving high net worth is a major accomplishment, maintaining and protecting that wealth evokes a set of challenges as well. One particular challenge that high net worth individuals face is navigating the American tax structures to optimize their wealth. Through careful estate planning, however, it is possible to preserve high net worth and fully protect your assets.
At John Park Law, we work with high net worth individuals to create dynamic estate plans that protect and preserve their wealth. By employing a range of estate planning strategies, we can ensure that your assets are protected from taxes and other vulnerabilities. Do not let your hard earned assets go to the government in taxes. Call us at 925-320-7077 to create an individualized plan for your wealth before it is too late.
What Is The Estate Tax And Gift Exemption?
The Internal Revenue Service has set the 2022 estate tax and gift exemption at $12.06 million dollars per United States citizen and/or permanent resident. Therefore, if your combined gross assets and prior taxable gifts exceed this value, you are required to file an estate tax return upon your death.
The IRS changes the estate tax and gift exemption yearly, depending on legislation and the political arena. The current figure of $12.06 million has been adjusted for inflation until December 31, 2025. Immediately after this date, however, it will be lowered to $5 million.
If your assets are close to that $5 million dollar mark or, alternatively, if your net worth exceeds the $12.06 million limit, it is important to begin estate planning. This is key if you wish to delay steep estate taxes.
How Can I Mitigate Taxes Through An Estate Plan?
The million dollar question on many peoples’ minds is how to reduce or delay taxes. This is particularly true for high net worth individuals, who have a higher price to pay due to their accrued assets and wealth. The answer is simple: estate planning.
At John Park Law, we tailor high net worth estate planning strategies to suit the unique needs of our clients. Across the board, however, there are some common strategies that we can employ to mitigate the burden of taxes, including:
- Irrevocable trusts such as Grantor Retained Annuity Trusts (GRATs): a gifting trust that allows grantors to transfer high-yielding or rapidly appreciating assets into a trust for future heirs without any associated gift tax.
- Family Limited Partnerships (FLPs): an ideal option for families with high net worth or blended families, FLPs allow wealth to move from one generation to another while reducing estate and gift taxes.
- Dynasty Trusts: similar to FLPs, dynasty trusts allow individuals to hold assets and make distributions throughout generations.
- Revocable Living Trusts: a key strategy for those looking to avoid probate after the death of a loved one, revocable living trusts are created during a person’s lifetime and can be altered throughout. This type of trust allows the grantor to dictate exactly how assets are distributed following their death.
- Life Insurance Trusts
- Charitable Trusts
This list is not comprehensive, however, as we have utilized more niche options such as Education Trusts, IRA Stretch Trusts, Qualified Personal Residence Trusts, and Asset Protection Trusts for our clients. There are a wide variety of trust strategies that estate planning lawyers can use to protect the assets of clients, and many of these options can work together to create a comprehensive, dynamic plan.
Create a High Net Worth Estate Plan with John Park Law
The team of experienced attorneys at John Park Law leverage state and federal tax structures and creative legal strategies to create an estate plan that optimizes your wealth. Tax legislation is constantly shifting depending on the latest politics and administration. For this reason, establishing a dynamic estate plan to protect your assets well in advance is critical.
You worked hard for your assets; do not leave your wealth vulnerable to lofty estate and gift taxes. At John Park Law, we advise high net worth individuals on how to best plan their legacy and ensure that their assets are handled with the utmost care. If you are preparing an estate plan or looking to amend your current estate plan to account for new assets, call us at 925-320-7077 today to discuss your options.