Estate Planning Is Wealth Management: Why You Need Both

While the term “wealth management” is comparatively new, the concept has been around for centuries. When someone puts in the time and work to build up their assets, it’s only natural for them to look for ways to protect their financial security. In the 20th century, that typically meant investing their money in a broad range of assets. 

However, wealth management is no longer the simple matter it used to be. While investing wisely remains a fundamental part of managing your net worth, there are many other methods you should consider. Among the most important is developing a comprehensive estate plan. 

The New Wealth Management Paradigm

The traditional approach to wealth management was simple. A financial advisor would meet with their clients, discuss retirement goals, and invest the money they were given to meet those goals. In fact, until the 1980s, this was among the only ways individuals could invest in the stock market. However, since the development of day trading and the first online stock brokerage firms, fewer and fewer people have found it worthwhile to hire a financial advisor just to manage their investments on their behalf. 

That’s led to a new wealth management paradigm. Advisors no longer focus entirely on managing their clients’ stocks and bonds. Instead, experienced advisors are providing more holistic financial services. This includes everything from having in-depth conversations about their clients’ specific preferences to giving advice on college funding, insurance concerns, and real property. Most importantly, many financial advisors now work with skilled estate planning attorneys to help people protect their families’ finances for generations to come. 

The Importance of an Estate Plan for Wealth Management

Estate planning and wealth management have always been more tightly related than many realized. If managing wealth is about ensuring your financial future, planning your estate is about protecting your family’s future. Some of the most valuable ways you can accomplish both goals include:

  • Passing on wealth with minimal tax burdens: The federal inheritance tax rate of 40% can take a significant chunk out of your assets if you aren’t careful. You can plan ahead with your attorney and advisor to minimize this impact and leave more to your family. 
  • Preventing probate battles: If someone disputes the administration of your estate during probate, the costs are covered by your former assets. That costs everyone, regardless of who wins. Having an ironclad will prevents this and ensures your last wishes are honored. 
  • Protecting specific assets: Real estate, intellectual property, art collections, and other unique assets can be tied up in probate for years, costing your loved ones time and money before they can access them. Making an asset protection plan can help avoid these problems. 
  • Safeguarding businesses: If you’re an entrepreneur or business owner, your company is one of the most valuable things you can pass on. You can include a transition plan in your estate plan to ensure that the organization stays operational long after you’re gone. 
  • Supporting your descendants’ education and lifestyles: You can give your grandchildren and beyond a strong start by using trusts and other financial tools to pay for their education, housing, and more without putting the nest egg at risk. 

With the right preparation, you can translate your high net worth into a lasting legacy of security, education, and opportunity. That’s the type of forward-thinking behavior that elevates families to dynasties.

How to Maintain Wealth Through Your Estate

A solid, well-designed estate plan is among the best ways to take your family from well-off to genuinely wealthy over time. While there is no single solution that works for every family, the first step is clear: seek the counsel of an experienced estate planning attorney.The Dayton Law Firm, P.C. offers detailed estate planning services from certified specialists. We will work closely with you to understand your goals for your family’s future and your current financial plans. From there, we will guide you through the process of developing a comprehensive plan to support yourself, your loved ones, and your descendants. Schedule your consultation with our skilled San Jose estate planning attorneys today to learn more about how we can help you.