Many celebrities can increase their net worth by using various wealth management strategies. Additionally, they can use many of these same strategies to protect their hard-earned wealth from unjust lawsuits or contentious divorces.

Based on numerous studies with celebrities and their legal representatives, it is evident that a large percentage of wealthy entertainers and athletes are failing to maximize their personal wealth. Various wealth management strategies and products can deliver results celebrities are looking for, but they are not being used. These wealth management solutions not only enable celebrities to better grow their wealth and lower their tax bills, but quite a number of them shelter wealth from litigants and creditors. These wealth management solutions can save celebrities millions of dollars.

While many wealth management solutions are applicable to affluent entertainers and athletes, these are some of the more sophisticated ones that are often overlooked:

• Setting up a defined benefit plan: Entertainers with loan out corporations, for example, can put away assets while taking significant tax deductions, such as $1 million or more annually by using particular defined benefit plans. Because of the business endeavors of many successful celebrities, they can use defined benefit plans to lower their income taxes while growing money tax-free.

• Superior risk management plus significant tax savings: Various wealth planning structures and products with major income tax deductions and the ability to address various business risks can be used with celebrities’ business interests. Some of these wealth management solutions can also be used directly by entertainers, such as when they go on tour.

• Eliminating taxes on investment portfolios: For celebrities with meaningful investment portfolios, it is possible to use a structure that eliminates income and capital gains taxes. This wealth management solution can be used with traditional investments such as equities and fixed incomes or with alternative investments such as hedge funds and private equity funds.

• Wealth planning cross-border arbitrage strategies: With many successful celebrities generating money throughout the world, it is often possible to leverage different tax jurisdictions to minimize taxes. This is not at all about secrecy. It is simply about understanding the various tax treaties between jurisdictions and benefiting from them.

• Asset protection planning: Relatively few hyper-successful celebrities have structured their wealth in ways that insulate it well. Very successful athletes and entertainers can protect their wealth from unfounded or frivolous lawsuits with strategies that can address their control needs and wants.

Celebrities and their advisors should consider additional wealth management solutions, such as interlocking partnerships. By failing to take advantage of applicable, albeit sophisticated, wealth management strategies and products, successful and wealthy athletes and entertainers are losing out.

Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.