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Three Do-It-Now Moves for Ultra High Net Worth Investors

Learn how to achieve your wealth objectives through three proactive moves that offer flexibility, access, and control.

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In our eyes, a successful wealth plan achieves flexibility, access, and control, or what we call F.A.C.  And there are three do-it-now moves that ultra high net worth investors (UNHWs) can make to achieve FAC. But before we get to those moves, let’s begin with a question your advisor should be asking you: What do you want to accomplish with your wealth? 

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Do you want a tax friendly way to pass on your legacy? Do you want to create an estate plan but fear you may lose access to those funds held in trust during your lifetime? Do you want to take advantage of strategies to “have your cake and eat it too”?  Well, you can begin reaching those goals with these three do-it-now financial moves. 

Move #1: Beating the 2025 Deadline That Cuts in Half Untaxable Wealth Transfers

A report last year from data/analytics firm Cerulli Associates predicted that U.S. households will transfer $84.4 trillion of wealth in the next two decades. That’s trillion with a “t”. And for those households, a critical wealth transfer deadline is looming, not in two decades, but in about two years due to existing tax law.

Current estate tax law allows individuals to transfer up to $12.92 million in assets with no gift tax implications. And couples can double that to nearly $26 million. But at the end of 2025, those amounts are scheduled to drop by roughly half! 

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And, while 2025 might seem a long way off, you can bet that when this already short window gets shorter and the deadline looms, there will be a crush of UHNWs rushing to beat it. When that happens, as one estate planning attorney told me, he and other lawyers will be so slammed with transfer requests they simply will not be able to address them all. So, yes, do it now. 

Move #2: Guarantee F.A.C. with a Trust That Is Not Irrevocable

For UHNWs in midlife or younger, putting money in an irrevocable trust that denies them access to the funds has little appeal.  Traditionally, assets transferred to an irrevocable trust are thereby removed from the estate, and thus, estate taxes. And this is terrific. Yet you lose access to those assets.

But, there is an alternative to this called a SLAT, or Spousal Lifetime Access Trust. And the reason SLATs have become one of the bedrocks of UHNW planning is they provide you all three F.A.C. benefits: Flexibility because there is no minimal amount to fund one, and you can fund them over a number of years. Access since you can maintain access to these assets during your spouse’s lifetime.  Which means, yes, you are in total control. So, creating a SLAT is definitely a do-it-now move as it provides FAC.

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Move #3: Create a Trust That Offers a Discount

While irrevocable trusts have restrictions, they offer a quite attractive advantage compliments of tax law. Let’s say you want to gift/transfer $1 million.  Since that $1 million will sit in an irrevocable trust, the IRS concedes that, in the end, it may not be a $1 million gift.  The IRS will allow you to discount its value. Meaning, you could potentially transfer, say, $1.4 million into the irrevocable trust, but it would only count it as a $1 million gift/transfer.

To sum up, implementing some or all of these do-it-now moves, not only helps you achieve F.A.C., it also gives you the most important thing of all: P.O.M. That is, peace of mind.

This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. To determine what is appropriate for you, please contact your Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed.
The tax and legal references attached herein are designed to provide accurate and authoritative information with regard to the subject matter covered and are provided with the understanding that Navon Wealth Advisors is not engaged in rendering tax, legal, or actuarial services. If tax, legal, or actuarial advice is required, you should consult your accountant, attorney, or actuary Navon Wealth Advisors does not replace those advisors.


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