For the original 1966 movie Alfie, composer Burt Bacharach penned some of
the greatest lyrics in a movie theme song. The song, “Alfie,” could be the best advice for high-net-worth
clients who struggle with estate planning and their legacy.
“What’s it all about, Alfie?
Is it just for the moment we live?
What’s it all about when you sort it out, Alfie?
Are we meant to take more than we give?”
Within the high-net-worth practices at Stonegate Private Counsel we often are asked for advice on proper
estate planning and the division of large sums of money to inheritors. There are no boilerplate rules for
inheritances, but over the past 30 years we’ve seen a few things that work.
Without exception all Stonegate clients want to provide greater opportunity and protection for their
inheritors, but “how much” and “when” are the two most troubling issues. This is when good planning and the
help of a lawyer are invaluable. As we’ve pointed out in previous articles assembling your team of trusted
advisors and having a plan is essential.
How much to leave to your loved ones and when is often a big struggle. Where children are concerned, we
believe they should be treated equally, but not necessarily in the same manner. This is where the use of
income splitting and testamentary trusts, insurance and family business succession planning can be very
important. Each child needs to be assessed on need, ability, maturity and future potential. As for “when” and
“how much,” experience has shown parents should not give away too much too early. Gifts of intangible items
like education and travel and the use of trusts and insurance are useful where appropriate. We encourage
clients to make gifts with “warm hearts,” but the right timing is an important factor. It can be a daunting
task.
Philanthropy is also a very useful estate strategy and it often incorporates family foundations, insurance
planning and family participation. Proper philanthropic planning can be enhanced by employing sophisticated
insurance and tax strategies. Furthermore, the legacy of charitable giving is often of great benefit to
heirs.
We often see high-net-worth families struggle with the family or philanthropy trade-off regarding wealth
transfers within their estates. There’s no right answer here, but as the “Alfie” lyrics suggest, “When you
walk let your heart lead the way.” This is an excellent starting point. Guidance and mediation by a
professional is helpful and can bring families closer together.
Over the past three years Stonegate has experienced two client estate plans that demonstrate how important
estate planning can be. Let’s call them Case A and Case B.
Case A was an estate with less than $10 million and very little planning and preparation had been completed.
In Case B, the estate was over $30 million, and extensive preparation and planning had been done. Using
trusted advisors, a family trust, life insurance, tax planning, good wills and charitable giving strategies,
Case B was dealt with efficiently, with less legal and tax costs than Case A. Case B was an example of estate
planning done right. An estate plan from Stonegate and the help from the client’s other professional advisors
allowed Case B to be dealt with simply, fairly and in a more timely manner.
With a healthy dose of philosophy from Alfie, and the help of trusted professionals, high-net-worth estate
planning can be a very enjoyable experience.•
This information is general in nature and is not intended to constitute an offer to buy or sell products or
services and should not be construed as providing individual investment advice. The opinions expressed here
are those of the writer and may not necessarily reflect those of Stonegate Private Counsel or its
subsidiaries and affiliated companies. Stonegate Private Counsel is a division of CI Private Counsel LP, a
wholly owned subsidiary of CI Investments Inc.
