10 Estate Planning Steps Wealthy Investors Might Be Missing

America’s wealthiest investors should have completed a comprehensive estate plan, but that is not the case, according to research from Spectrem Group. It seems that investors with a net worth of $25 million or more, not including primary residence, are as reticent about end-of-life topics as their less affluent counterparts.

The study noted that lack of proper estate planning at the highest levels of wealth can result in estates potentially losing millions of dollars or struggling to obtain access to huge amounts.

“While no one wants to talk about death, it is one of the few certainties in life, making it critical that investors are prepared for it,” according to Spectrem. “Properly preparing for end-of-life allows for the maximum amount of assets to be distributed to the estate’s beneficiaries and prevents unnecessary financial losses and delays.”

Spectrem Group researchers fielded the survey in late 2020. It was completed by 151 individuals who were the primary decisions makers on day-to-day financial matters within their households.

Simple Actions

The study laid out several basic estate planning steps that only a slight majority of the wealthy investors in the survey reported they had taken, though many said they planned to do so at some point.

One is to make a list of all investment and bank accounts. This is a time-consuming chore, to be sure, especially for an investors with multiple accounts across several advisors, but a good way to keep an account from being overlooked.

In addition, wealthy investors should identify beneficiaries for every account in order to protect their assets and facilitate a smooth estate distribution. The study said this also extends to insurance coverage. It is important that they identify both primary and secondary beneficiaries.

Another basic step is creation of a will or trust, something many wealthy investors in the survey lack. This represents a significant gap in proper estate planning, according to the study. It can result in major delays to estate distributions and can cause unnecessary estate tax liabilities, what many investors initially think of regarding estate planning,

See the gallery for 10 basic estate planning steps, and the degree to which investors have taken action on each one.

Michael S. Fischer