Estate Planning To-Do List for High-Net-Worth Professionals Switching Jobs

A professional in a rush….

Transitioning to a new job is an exciting yet busy time, especially for high-net-worth professionals. While updating LinkedIn profiles and negotiating salaries often take center stage, it’s crucial not to overlook estate planning. Job changes can significantly impact your financial picture, and ensuring your estate plan aligns with your new circumstances is essential for protecting your assets and your loved ones.

Here’s a comprehensive to-do list to keep your estate planning in check during this transition:

• Review Your Beneficiary Designations
• Reassess Retirement Accounts
• Update Powers of Attorney
• Evaluate Stock Options and Deferred Compensation
• Address Changes in Insurance Coverage
• Revise Trusts and Wills
• Update Estate Planning for Business Interests
• Evaluate Your Tax Strategy
• Communicate with Your Family
• Transitioning from Employment to Self-Employment or Starting a Business
• Schedule a Review with Your Estate Planning Attorney

Review Your Beneficiary Designations

Many employer-sponsored benefits, such as 401(k)s, pensions, and life insurance policies, have beneficiary designations that override your will or trust. Ensure your beneficiaries are up to date, especially if your family situation has changed due to marriage, divorce, or children. If your new employer offers similar benefits, update designations during onboarding to avoid any complications.

Reassess Retirement Accounts

When switching jobs, you’ll often face decisions regarding old retirement accounts like 401(k)s. Consider whether to roll them over into your new employer’s plan or into an IRA. Each option has distinct tax and management implications, so consult a financial advisor. Additionally, ensure these accounts are properly reflected in your estate plan.

Update Powers of Attorney

A change in professional or financial circumstances necessitates updating your financial and healthcare powers of attorney. Make sure these documents appoint trusted agents who are well-suited to manage your affairs. If relocating, draft new documents that comply with local laws to ensure enforceability.

Evaluate Stock Options and Deferred Compensation

Stock options, restricted stock units (RSUs), or deferred compensation often form a significant part of a high-net-worth professional’s estate. Include these assets in your trust or succession plan, and work with advisors to address associated tax implications.

Address Changes in Insurance Coverage

Review employer-provided life and disability insurance to ensure coverage meets your needs. Supplement policies if necessary, and confirm ownership and beneficiary designations align with your estate plan to avoid conflicts.

Revise Trusts and Wills

A job transition often brings new assets such as stock options or equity. Update your will or trust to account for these changes, ensuring assets are titled correctly to avoid probate and facilitate seamless wealth transfer.

Update Estate Planning for Business Interests

If your new role includes equity in a private company, update your business succession plans or buy-sell agreements. These documents dictate what happens to your business interests in the event of incapacity or death.

Evaluate Your Tax Strategy

Job transitions can shift your tax bracket, impacting estate tax planning. Review strategies like gifting, creating irrevocable trusts, or leveraging exemptions to minimize your taxable estate.

Communicate with Your Family

Discuss updates to your estate plan with family members or trustees. Clear communication ensures everyone understands your wishes, preventing future disputes.

Transitioning from Employment to Self-Employment or Starting a Business

Starting your own business introduces unique challenges. Create a business succession plan, choose an appropriate entity structure, and consider retirement plans like a solo 401(k) or SEP IRA to align with your estate goals.

Schedule a Review with Your Estate Planning Attorney

A comprehensive review of your estate plan ensures updates are properly integrated. An estate planning attorney can help identify gaps and optimize your legacy.

Call to Action: Contact Nicholas S. Ratush, PC, today to schedule a consultation and align your estate plan with your new professional and financial circumstances.