Many wealthy families in New York have no estate plan set up to govern how assets should be dispersed to their heirs. According to a survey of 750 millionaires that was conducted by CNBC, 38 percent of people with at least $1 million in investable liquid assets have not established an estate plan with the assistance of a financial adviser.
The results of the survey demonstrated that millionaires who have over $5 million in assets are more likely to establish an estate plan than millionaires with fewer assets. The survey also showed that estate plans are more popular with millionaires who identify as Republican than they are with millionaires who identify as Democrat or independent.
Some financial planners say that the reason why over one-third of millionaires choose not to set up an estate plan is that they are fed up with the constantly changing estate tax laws. Rather than update estate planning documents every time the law changes, many individuals just give up on their estate plan completely. Other millionaires might feel that they don’t need an estate plan if their assets are worth less than the current federal estate tax exemption of $5.43 million.
Estate planning is about more than just helping beneficiaries to avoid estate taxes. A comprehensive estate plan could include powers of attorney that will appoint a trusted individual to make financial or medical decisions if the principal becomes incapacitated. If an individual or couple has minor children, an appropriate document should also name legal guardians for the children. An estate planning attorney can assist in the recommendation and preparation of documents that are suitable for the particular circumstances of a client.