Despite their wealth and business savvy, more than one-third of high-net-worth families have not taken the most basic steps to protect and provide for their loved ones when they die, according to a recent survey by CNBC.com. The CNBC Millionaire Survey found 38 percent of those with investable assets of $1 million or more have not used a financial expert to establish an estate plan, while 62 percent have.
CNBC.com’s recent article, “Wealthy suffer from 'estate-planning fatigue',” says that those with $5 million or more (68%) were more likely to seek help with estate planning, compared to those with $1 million to $5 million in assets (61%), according to the survey. The poll covered 750 millionaires.
The political break down was as follows: Republicans (68%) were more likely to use an estate planning expert to create an estate plan than Democrats (61%) or Independents (58%).
The article says that the constant changes to the federal estate-tax law for nearly 10 years (until this was made permanent in 2013) left many rich folks in "estate-planning fatigue." Those estate planners interviewed in the article point out that our country has had quite a bit of uncertainty with estate taxes. Each of the changes led attorneys and advisors to contact their clients and encourage them to keep their documents up-to-date and to incorporate the changes as needed. Finally, clients said they’d had their fill.
In addition to this, the higher federal estate-tax exemption amount—now at $5.43 million per person—has also made estate planning less of a priority for many wealthy families. Many people believe estate planning is just for reducing estate taxes, the article explained. So if they don't have to pay estate tax, they may feel like there’s really no reason to do any estate planning.
However, bear in mind that there are still 15 states that impose their own estate taxes, and these can become applicable at much lower thresholds. For instance, the exemption for New Jersey is $675,000 and Rhode Island's is $921,655. Based on where you live, estate taxes may still be an issue.
So there’s a lot to cover with an estate planning attorney.
Speak with an experienced estate planning attorney because there’s a lot more to this than the size of one's taxable estate.
Reference: CNBC.com (June 29, 2015) “Wealthy suffer from 'estate-planning fatigue'”