Building significant wealth takes a lifetime of hard work, discipline, and smart decision-making. Protecting it and passing it on to the next generation takes an equally intentional approach. For high-net-worth individuals and families in Utah, estate planning goes far beyond a basic will or trust. It requires a comprehensive strategy that accounts for taxes, business interests, investments, life insurance, and long-term legacy goals.
The good news is that with the right plan, the federal estate tax, which currently applies to estates above a certain threshold, is largely avoidable. At ProvenLaw, we believe the federal estate tax is a voluntary tax. You just need to be proactive and get ahead of it.
What Makes High-Net-Worth Estate Planning Different?
Standard estate planning tools are designed for the average family. High-net-worth planning requires a more sophisticated set of strategies tailored to the specific types of assets a client holds and the goals they have for transferring wealth.
The factors we consider include the type and nature of your assets, whether you own a business, the structure of your investments and retirement accounts, the presence of life insurance, and whether you are already working with a financial advisor or CPA. Each of these elements shapes which strategies will be most effective for your situation.
Estate Freeze Techniques
One of the most powerful tools in high-net-worth planning is the estate freeze. This involves transferring assets that are likely to appreciate significantly, such as a growing business or investment portfolio, out of your estate and into your beneficiaries’ hands while the asset’s value is still relatively low.
By doing this during your lifetime, future appreciation occurs in your beneficiaries’ hands, where it is less likely to trigger the federal estate tax. This technique is particularly effective for business owners and investors who hold assets with strong long-term growth potential.
Irrevocable Life Insurance Trusts
Many high-net-worth individuals carry substantial life insurance policies as part of their financial plan. However, if those policies are owned by you personally at your death, the death benefit is included in your taxable estate and could be subject to federal estate tax.
An irrevocable life insurance trust, or ILIT, allows you to move your life insurance policy outside of your taxable estate while still preserving the liquidity and the benefit it provides. Your beneficiaries still receive the payout, but it is no longer counted as part of your estate for tax purposes.
Grantor-Retained Annuity Trusts and Spousal Lifetime Access Trusts
A grantor-retained annuity trust, or GRAT, is another effective technique for transferring appreciating assets out of your estate. You transfer assets into the trust, receive an annuity payment for a set period, and if the assets grow faster than the IRS’s assumed rate of return, that excess growth passes to your beneficiaries tax-free.
A spousal lifetime access trust, or SLAT, allows you to make a gift to an irrevocable trust for the benefit of your spouse and other family members, removing the assets from your taxable estate while still allowing your spouse to access the trust’s income and principal during their lifetime.
Business Succession Planning
For business owners, estate planning and succession planning are inseparable. Your plan needs to address not just who will inherit your business interest, but who will manage the business if you are no longer able to, and how the transition will be structured.
Whether you plan to pass the business to the next generation, sell it to a third party, or transfer it to key employees, each path has different legal, tax, and financial implications. Many business owners delay these decisions simply because they are unsure where to start. We work through those decisions alongside your financial advisor and CPA to build a plan that works for your business and your family.
Working as a Team with Your Financial Advisors
High-net-worth estate planning rarely happens in isolation. We frequently work alongside our clients’ financial advisors and CPAs to make sure every piece of the plan is coordinated. Your financial advisor brings knowledge of your investment structure, account types, asset basis, and tax exposure. Your CPA understands your income and the tax consequences of various strategies. Our role is to bring those pieces together with the legal tools that carry your plan forward.
Whether you are looking at minimizing estate taxes, protecting assets, planning for business succession, or transferring wealth to the next generation, a team approach produces the best outcomes.
