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The ultra-high-net-worth take justifiable pride in their financial skills. Yet so many wealthy families come to us for advice with their estate planning in a state of disarray. Their estate plan is either outdated, nonexistent, or just completely wrong.  

What are the potential consequences of this oversight? If they pass away before they untangle that knot, the court battles over their estates can drag on for years, drain the coffers, and pit brother against brother. We see it in the headlines all the time. 

Why is this so common? Why do people who had the financial savvy to build a massive fortune seem to choke on the one-yard line? Why are they asleep at the switch when it comes to estate planning — and what can be done to fix the problem?  

No One Likes to Think About Their Own Death 

Possibly the number-one reason wealthy people neglect the estate-planning chore is the same reason people of every net worth neglect the estate-planning chore — it involves contemplating their own death. A world that trucks on into the future without them. It’s morbid, unsettling, and possibly a little depressing.  

Some people even have superstitions about estate planning. They think that by creating devises and demises triggered in the event of their death, they are somehow bringing about their own death — tempting the Grim Reaper to come for them early. Others believe that the more plans they make for after their death, the tighter they try to control circumstances from beyond the grave, the more likely these plans are to fall apart.  

They Planned Their Estate Before They Became Wealthy 

Some ultra-high-net-worth families come to us with estate plans that would be perfectly appropriate — for a six-figure earner with a fully-funded 401(k), nowhere close to the multimillion-dollar threshold where estate taxes start to kick in. 

Why? Because they made their estate plan before they made their fortunes. Their new financial circumstances make the old plan woefully inadequate — but in their mind that loop is closed. They checked “Estate Planning” off the to-do list. Why reopen it? 

Laws Can Change Every Year 

This highlights another classic trait of high-performing individuals — they like to close mental loops. They like to “set it and forget it.” Think of how Steve Jobs and Mark Zuckerberg always wore the same outfit — they didn’t want wardrobe-selection to take up crucial early-morning brain power. 

But while they may have created their estate plan after they became wealthy, that doesn’t mean that circumstances stay the same. Laws regarding taxes and estates can and do change on an annual basis. The plan could become outdated from one year to the next simply by virtue of an Act of Congress or a change in the IRS rules.  

Nobody wants to make time for it, but we recommend that estate-holders review their estate plans with the help of a professional every year.  

The Skills to Become Wealthy Aren’t The Same as the Skills of Estate Planning 

The above reasons all smack of unforced errors. Nobody is perfect, but you would think that people with the discipline to build a fortune would be smarter than that — that they would have the discipline to scrupulously plan for their own demise. 

But the truth is that the skills it takes to amass an ultra-high net worth don’t really intersect with the skills it takes to create a sensible estate plan — especially for an extremely large estate. It takes much more than a simple will or living trust to ensure an orderly transfer of wealth, especially if you want to shield that fortune from taxation and instead bequeath it for the benefit of heirs, successors, and/or charities. 

Estate planning requires the skills of an attorney, CPA, and business analyst. Ultra-high-net-worth families and individuals are usually entrepreneurs and business-builders. They aren’t CPAs or lawyers themselves — they hire CPAs and lawyers. They probably don’t have the skillset to adequately prepare their estate until after their death. Their estate plan won’t be in good shape unless they take proactive steps to get it in shape. 

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Indeed, for ultra-high-net-worth individuals and families, the best solution for inadequate estate planning is to get proactive — hire professionals, create a plan based on current laws and circumstances, and put that plan into effect. Then revisit that plan every year to make sure it’s still viable. 

If that sounds like a pain, J&G Associates can make the process painless — no more than one day a year. One day a year, and you can sleep easy knowing your estate plan exists, reflects the current laws, and will provide for your successors long after you are gone.