How We Help: Ultra-High-Net-Worth Clients

Written By: Nick Ziarek, CFP®, CFA

One of the most extraordinary things is the American dream of making it big and achieving financial independence. For those who have taken the risk to start their own business and poured years of sweat, hard work and devotion into growing it into a successful entity, the payoff can be generational levels of wealth. While such rewards can minimize certain risks and concerns, they also open plenty of new opportunities and considerations. At Shakespeare Wealth Management we offer the experience and detailed attention to tailor solutions for those new complexities, such as:

Wealth Preservation

Often, the greater one’s wealth, the more complex it is, and the more likely the assets are spread over various entities. These may include multiple real estate holdings, LLCs, family trusts, or other operating businesses. Ensuring assets are appropriately structured and titled will help protect them now and in the future should something happen to you.

Example: Client had amassed significant real estate from hunting land and a home on the lake up north to an oceanfront property. Certain properties remained in just the spouse’s name, while others the client hoped to pass on to their children. We helped compile all properties owned through various public county records and gathered property tax bills to identify the legal owner. We then coordinated with their estate attorney to transfer key properties to a QPRT to reduce future gift tax and estate tax liabilities.

Tax Optimization

Taxes are typically the largest expense, amplifying the need for coordination between Shakespeare and your team of advisors, including CPAs and estate attorneys. Communication between parties is often transactional and sometimes too late when one party recommends a change that affects another aspect of your plan. Implementing strategies such as tax-loss harvesting, direct indexing, and stacking charitable deductions are just a few ways to mitigate your tax exposure, both now and in the future. More advanced strategies include 1031 exchanges, Charitable Remainder Trusts, and Irrevocable Life Insurance Trusts.

Example: Client recently went through the sale of a business that would realize a large capital gain. With the cash infusion, we worked with an investment manager to create a custom index following our equity model in which they purchased underlying individual stocks. This direct indexing strategy was able to mimic our portfolio and achieve a positive return but also allowed for harvesting more than $100,000 in losses to offset gains from the business sale.

Investment Management

There may be situations where investing in mutual funds or exchange-traded funds (ETFs) does not provide the necessary exposure or diversification for your portfolio. Having access to leading investment managers and vehicles, whether through separately managed accounts, direct indexing, limited partnerships, alternative investments, or real estate, can help you achieve your long-term investment goals while appropriately managing risk.

Example: After developing an appropriate asset allocation for a client, which included using separately managed accounts to recreate various bond indexes in order to match maturities with known liabilities, we identified situations where the client needed less liquidity, allowing them to invest in a private credit fund. The fund offered higher return potential and increased yield, which was acceptable given the separately managed accounts used elsewhere in their portfolio.

Estate and Legacy Planning

Ultra-high-net-worth estates often face substantial estate taxes, and their estate plans often reflect that reality with complex structures. Regularly reviewing the estate plan and being aware of changes in estate exemptions and laws are vital to ensuring the planning put in place is fully utilized.

Example: Client had a taxable estate, which included a trust that would flow directly into their adult child’s estate, although the beneficiaries of the trust while the client was alive were the adult grandchildren. Active conversations and planning from working with all family members helped identify opportunities for the grandchildren to take qualified withdrawals during their grandparents’ lifetime, helping reduce the size of the trust that ultimately flowed back into their parent’s future taxable estate.

Insurance Planning

Life insurance is commonly used to protect from unexpected events in one’s life, but it is a critical component of estate planning and wealth preservation for larger taxable estates. We work to assess your current insurance policies but also identify solutions as they integrate with your legacy and charitable intents.

Example: Client had a sizeable taxable estate from the sale of a privately held family business. They wanted to protect their estate from taxes, which led us to build a model projecting the future value and estimated estate taxes. Using those projections, we engaged with an estate planning attorney to establish an irrevocable life insurance trust that would purchase a life insurance policy outside their estate. After coordinating with an insurance agent on the plan, the client purchased a second-to-die life insurance policy that would provide a large death benefit to cover the expected estate tax bill.

Family Education

Money conversations can be some of the hardest to have within a family, and when wealth is generational, the strongest asset to pass on is your values. Creating open and ongoing communication between generations, sharing your values, dreams and expectations, and focusing on family dynamics beyond money and finances can all positively influence the next generation.

Example: A couple approached us on when, but more importantly how, to start sharing the intricacies of their financial plan and the values that helped them accumulate what they had, ensuring generations to come would be able to share in their legacy. We worked with them to develop a family meeting. This included identifying a welcoming and comfortable location for all, building an appropriate agenda, sharing only what the client was comfortable with at first, and setting the expectation to share more at future meetings. From there, we helped prepare the information to be shared, assisted in facilitating the conversation and ensured all considerations were accounted for. By setting the expectations and helping see them come to fruition, the family set a standard for regular formal meetings and an avenue for ongoing meaningful conversations.

At Shakespeare Wealth Management, we understand with great success comes greater complexity and opportunity. Our goal is to provide the clarity, structure and confidence to navigate that complexity. We offer the specialized knowledge and thoughtful guidance to support every aspect of your financial life. Let us help you preserve, grow, and pass it on with purpose.