A majority of families wealthy enough to have their own financial offices may have estate plans that are sorely out of date, according to a survey by Rothstein Kass, a leading national professional services firm providing accounting, auditing and tax services.
More than three quarters of the estate plans of the ultra-wealthy clients studied were at least three years old despite the fact that nearly 95% of them have experienced significant life changes since the estate plans were drawn up, according to a survey of 74 single-family office executive directors.
"Creating and enacting an estate plan is often the first step of building a successful integrated wealth management strategy," said Rick Flynn, principal and head of the family office group at Rothstein Kass, whose study is titled Missing the Mark.
Maintaining up-to-date estate plans is crucial to taking advantage of the benefits of advanced planning, he said.
"The single-family office executive has a duty to work with clients to engage and help them understand the necessity of frequently reviewing estate plans and focusing on long-term goals," Flynn added.
The survey also found that 53% of the wealthy families did not have formal asset protection plans in place and nearly 84% of the life insurance plans have not been reviewed in three or more years.
More than half of the families have been involved in divorce or unjust lawsuits and 90% are concerned about family members being involved in divorce proceedings or unjust lawsuits, the survey showed.
-Karen DeMasters