As the new year begins, it's the perfect time for high-net-worth families to take stock of their financial and estate plans. A proactive approach can ensure your wealth is protected, optimized, and aligned with your long-term goals. Here are some key steps to include in your financial health check as you plan for the year ahead.

1. Review and Update Your Estate Plan

Life changes quickly, and so should your estate plan. Take time to review:

• Wills and Trusts: Ensure your documents reflect current family dynamics, such as new marriages, divorces, or births.
• Beneficiary Designations: Confirm that life insurance policies, retirement accounts, and other financial instruments list the correct beneficiaries.
• Tax Strategies: For families with substantial assets, estate tax planning is crucial. In 2025, the federal estate tax exemption is $13.99 million per individual. Consider strategies like irrevocable trusts or gifting to minimize tax burdens. You can gift up to $19,000 in 2025 to any individual without paying any gift tax. Couples can gift up to $38,000.

2. Evaluate Your Asset Protection Plan

High-net-worth families are often more vulnerable to lawsuits and creditors. Ensure your asset protection strategies are solid by:

• Setting up limited liability entities for business or investment assets.
• Reviewing umbrella insurance policies for adequate liability coverage.
• Establishing trusts to shield assets from potential legal claims.

3. Maximize Tax Efficiency

Taxes can significantly impact wealth preservation. Work with your tax advisor to:

• Optimize annual charitable giving for tax benefits.
• As mentioned above, utilize the annual gift tax exclusion, which allows individuals to gift up to $19,000 per recipient in 2025 without impacting their lifetime exemption.
• Consider tax-loss harvesting to offset gains in your investment portfolio.

4. Reassess Long-Term Care Plans

The rising cost of long-term care makes it essential to evaluate your preparedness. Discuss with your advisor:

• Long-term care insurance options.
• Creating a healthcare power of attorney and advance directives.
• Exploring Medicaid planning strategies if necessary.

5. Review Business Succession Plans

For those with family-owned businesses, a clear and updated succession plan ensures a seamless transition. Address:

• Who will take over key roles.
• How ownership will be transferred.
• Tax-efficient strategies for transferring business interests.

6. Revisit Investment Strategies

The start of the year is a great time to:

• Review your portfolio's performance and alignment with your goals.
• Adjust allocations based on market conditions and personal risk tolerance.
• Explore alternative investments, such as real estate or private equity, for diversification.

7. Communicate Your Plans

Open communication with family members about your financial and estate plans can prevent misunderstandings and conflicts. Consider scheduling a family meeting to:

• Discuss your goals and plans.
• Educate heirs about managing inherited wealth.
• Address any concerns or questions.

8. Consult Your Professional Advisors

Finally, assemble your team of trusted advisors, including your estate planning attorney, financial planner, and tax advisor, to ensure all aspects of your financial health are covered. Their expertise can help you navigate complex laws and maximize the benefits of your estate and financial plans.

Final Thoughts

Starting the year with a comprehensive financial health check sets the tone for success and security in the months ahead. For Pennsylvania families, understanding state-specific laws and regulations is crucial. If you need assistance updating your estate plan or implementing new strategies, I'm here to help. Schedule your free consultation with my office today by using the link below to ensure your financial future is on the right track.

https://letsmeet.io/scottlynett/free-15-min-consult-phone