When Your Net Worth Reaches This Number, It's Time To Upgrade Your Estate Plans

Having a plan for what happens to your assets when you die is important, whether you have $10,000 or $10 million. But the type of plan you need often depends on how much you're leaving behind. For instance, high-net-worth individuals are often defined as those with $1 million or more in liquid assets. Once you reach that level of wealth, it may be time to consider revamping your estate planning practices.

In much the same way that those with liquid assets above $1 million should upgrade their financial planning in general, ensuring your estate is set up in a way that will competently distribute your assets and reflect your wishes is essential once you reach this financial milestone.

For those with less than $1 million in assets, it may be sufficient to have a will that outlines how your wealth should be distributed and to keep beneficiaries up to date on your retirement savings, life insurance policies, and other accounts. For larger estates, however, that might not be enough. Additional planning is required to ensure your assets are protected, taxes are minimized, and anyone who is financially dependent on you continues to be supported. A plan can also dictate who will handle your financial affairs if you become incapacitated, which is essential if there are significant assets to manage.

One reason that upgrading your estate plan is so important once your assets exceed $1 million is the additional tax exposure that can accompany greater wealth. While only a small percentage of people have enough assets to trigger federal estate taxes — as of 2026, you need more than $15 million in assets to be impacted — some states impose estate or inheritance taxes at much lower thresholds. For example, Oregon's estate tax ranges from 10% to 16%, and can be levied on assets over $1 million. In Massachusetts, estates valued above $2 million can be taxed up to 16%. Creating a more advanced estate plan can help reduce these potential tax implications and preserve more of your wealth for your heirs.

There are also other costs associated with estate distribution that proper estate planning can help mitigate. For example, probate is a long and costly legal process that often comes with estate distribution, but there are steps you can take in life that could allow your beneficiaries to avoid it completely.

Additionally, there is also a possibility that a high-net-worth individual could lose the capacity to manage their own finances before they pass. A good estate plan would designate someone to act as your power of attorney to step in and handle your affairs if you become incapacitated. For someone with significant wealth, this is essential to ensure those assets are protected and continue to be properly managed.

For high-net-worth individuals looking to step up their estate plan, one of the first steps is to consult experts who can help develop a sound plan that meets all your objectives. An estate planning attorney can be instrumental in determining how to best distribute the assets and can draft all of the necessary documents to ensure your wishes are carried out. It's also a good idea to speak with a financial planner, an accountant, and a life insurance agent. Together, they can help minimize potential taxes, mitigate risks to the estate, and ensure that all your wealth is accounted for in your estate plan.

Another important step in creating your plan will be to set up trusts to ensure your assets go where you want them to. There are many types of trusts, though they tend to help accomplish the same goals: avoiding probate, getting assets and property to beneficiaries in a timely manner, and minimizing the expenses related to managing and distributing an estate. However, having a trust doesn't totally replace the need for a will, so you may still want to prepare a will should you have wishes for your beneficiaries that go beyond the scope of your financial holdings.