Exploring the integration of security and estate planning for HNW & UHNW families, this article highlights strategies to protect personal safety and generational wealth through comprehensive, tax-efficient solutions.
In today’s complex landscape, ultra-high-net-worth (UHNW) families face unique challenges that intertwine personal security with estate planning. The recent incident involving UnitedHealthcare CEO Brian Thompson has underscored the critical need for integrated strategies that safeguard both individuals and their legacies.
The Evolving Security Landscape for UHNW Families
Traditionally, personal security for UHNW individuals focused on physical protection. However, the current environment demands a more holistic approach that aligns security measures with tax efficiency and succession planning. This shift recognizes that security is not merely a protective measure but a fundamental component of comprehensive estate planning.
Tax-Advantaged Security Programs
A recent analysis by Baker McKenzie highlights an often-overlooked opportunity: properly structured corporate security programs can provide tax-advantaged protection that extends beyond the executive to family members. The IRS offers favorable treatment for “overall security programs” that meet specific requirements, presenting several advantages:
- Tax Deductibility: Security costs are tax-deductible for the company.
- Non-Taxable Benefits: Benefits are not treated as taxable income for protected individuals.
- Family Coverage: Protection can extend to spouses and children.
- Commuting Security: Even commuting arrangements can be included.
These provisions enable UHNW families to implement robust security measures without incurring additional tax liabilities, effectively integrating personal protection into their estate planning strategies.
Integrating Security into Estate Planning
The convergence of security and estate planning necessitates a multidisciplinary approach:
- Comprehensive Risk Assessment: Evaluating potential threats to both personal safety and financial assets.
- Customized Security Solutions: Developing tailored security programs that comply with IRS guidelines to maximize tax benefits.
- Succession Planning: Ensuring that security measures are sustainable and adaptable to future generational transitions.
- Legal and Tax Compliance: Collaborating with legal and tax professionals to navigate the complexities of implementing security measures within the framework of estate planning.
Final Thoughts
For UHNW families, the integration of security considerations into estate planning is no longer optional but essential. By adopting a holistic approach that combines personal protection with tax efficiency and succession planning, families can safeguard their well-being and preserve their legacies for future generations.
This article is based on insights from “Security and Estate Planning: New Considerations for UHNW Families” by Matthew F. Erskine, published on January 9, 2025, in Wealth Management.
Protect What Matters Most with Exodus Global
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