Respondents said that the most important tools available for reducing taxes are:
- 40l(k) and IRA plans, listed by 60% of respondents,
- creating a trust, cited by half of those surveyed,
- while 22% listed making annual gifts to charity.
The survey “Financial Planning Among America’s Wealthy,’ conducted among 400 Americans with investable assets of more than $250,000 by Lincoln Financial Group (LFG), found that almost three-quarters of respondents believe that their assets are not sufficiently protected from excessive taxes. In addition:
- just over half say that their assets are only moderately protected,
- one out of five say there is very little protection,
- while 27% cite adequate protection.
When asked to list goals,
- over two-thirds of survey participants listed preserving wealth as their most important goal;
- while almost 60% listed avoiding excessive taxes;
- accumulating wealth was cited by 46%;
- passing wealth onto their heirs was the goal of 38% of those surveyed;
- while almost a quarter listed preserving their company as a very important goal.
Although the study shows that the use of trusts for estate planning is highest among those aged 60 or older and who have $1 million or more in investable assets, creating trusts is no longer the preserve of the affluent older generation. Some 56% of respondents in their late-thirties or early-forties have established a trust
In terms of estate planning, the survey found that:
- about 45% believed that providing for the needs of a spouse is the most important reason for estate planning;
- while just under a quarter said leaving an inheritance to children or grandchildren was most important;
- almost one in five said that lessening the federal estate tax burden was a priority;
- while one in ten cited preserving a family business.
The reasons for undertaking estate planning varied among:
- reaching a certain age, cited by 27% of respondents,
- birth of children (21%),
- reaching a certain level of wealth (18%),
- health concerns (8%),
- birth of grandchildren (4%), and
- concern over preserving a business was cited by only 3%.