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Tuesday, January 21, 2025

By Jeff Velastegui
Founder of The Legacy Group, Personal Estate & Business Advisor

Introduction

For high-net-worth individuals, wealth preservation is about more than growth—it’s about protection. In a world of economic uncertainties and personal liabilities, safeguarding your assets and ensuring financial stability requires proactive planning. Let’s explore essential strategies to help secure your wealth for future generations.

Asset Protection Strategies for High-Net-Worth Families

Shielding wealth from potential threats, such as lawsuits or economic downturns, is vital for long-term financial health. Key strategies include:

  1. Trusts for Asset Protection
    • Irrevocable Trusts: Transfer assets out of your personal estate to protect them from creditors and legal claims.
    • Domestic Asset Protection Trusts (DAPTs): Available in certain states, these trusts combine asset protection with retained control over trust assets.
  2. Business Structures for Liability Management
    • Limited Liability Companies (LLCs): Separate personal and business assets to minimize exposure.
    • Family Limited Partnerships (FLPs): Transfer wealth while maintaining management control, ensuring long-term family stewardship.
  3. Insurance Solutions for Wealth Stability
    • Life Insurance: Provide estate liquidity to cover taxes or debts, ensuring assets remain intact for heirs.
    • Umbrella Insurance: Extend liability coverage to guard against significant financial losses from lawsuits.

Pro Tip: Work with experienced advisors to integrate these strategies seamlessly into your financial plan.

Addressing Estate Taxes to Protect Generational Wealth

Estate taxes can erode wealth intended for future generations. Understanding and planning for these taxes is crucial to preserving generational wealth. Here are some considerations.

  • Federal Estate Taxes: In 2025, estates above $13.99 million per individual face a tax rate of up to 40%. Strategic planning can reduce this burden.
  • State-Specific Taxes: Understand your state’s inheritance and estate tax rules to preserve more wealth for heirs.

Tax-Efficient Tools:

  • Annual Gifting: Take advantage of the $19,000 per recipient tax exclusion to transfer wealth tax-free.
  • Charitable Giving: Establish charitable trusts or foundations to reduce taxable estate size while supporting causes that align with your values.

Fostering Stability Across Generations

Wealth preservation extends beyond legal structures. It’s also about ensuring the next generation is prepared to manage and grow their inheritance responsibly.

  1. Educating Heirs: Financial literacy programs and open family discussions prepare heirs for future stewardship.
  2. Customized Trusts: Consider education or incentive trusts to guide how wealth is used, ensuring alignment with family goals.
  3. Regular Reviews: Update your plan regularly to reflect changes in laws, finances, or family dynamics.

Key Takeaways

Wealth preservation is a dynamic process that requires a combination of legal strategies, financial planning, and proactive engagement. With proper asset protection, tax efficiency, and multigenerational planning, you can safeguard your legacy while providing for future generations.

📩 Start Protecting Your Wealth Today

Schedule a consultation today to discuss your estate planning needs. VisitThe Legacy Group’s Estate Planning Page to learn more or contact us at info@legacygroupny.com or call (516) 682-3383.

Any discussion of taxes is for general information purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate. 

Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC. The Legacy Group is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. [1393 Veterans Memorial Hwy, Suite 307S, Hauppauge, NY 11788] (516) 682-3383. CRN202801-7889720