Estate Planning for High-Net-Worth Families and Judaism

It can be challenging to manage and distribute the assets of families with high net worth due to their businesses, real estate, investments, and other significant assets. It also requires specific tax planning strategies to minimize estate and gift taxes. Culturally, certain religions also bring unique considerations, particularly the Jewish faith, which accounts for Halakhah and civil law. Estate planning for Jewish families of high net worth requires specialized knowledge from an estate planning attorney.

What Constitutes High Net Worth

High net worth individuals (HNWI) refer to people with liquid assets exceeding a certain figure. HNWIs fall into other category subsets, with the first having $1 to $5 million in investable wealth, mid-tier with $5 to $30 million, and ultra-HNWIs with liquid assets of more than $30 million. The US HNWI population leads the world in high-net-worth individuals.

Jewish Law (Halakhah: The Way)

Halakhah law provides guidelines for the distribution of assets upon death, including the “laws of inheritance” or Halakhic inheritance. These guidelines may differ from the civil laws of the state where the family resides. Jewish families need to work with estate planning attorneys knowledgeable about civil and Halakhah law to meet state inheritance law while complying with religious doctrine.

There is enormous importance in having a valid will to comply with the Torah inheritance laws. Absent a valid secular will, a person dies intestate and is subject to the state’s intestacy laws of asset distribution which differs from the Jewish order of inheritance.

Order of inheritance may depend on how strictly the Jewish family adheres to the religious doctrine. Jewish Orthodoxy inheritance is according to the seder of yerusha. If a man has sons, they are the sole inheritors of his estate. If there is more than one son, each inherits an equal share except the bechor, or oldest male son, who receives a double portion. Adopted sons and daughters don’t inherit at all.

Jewish families may wish to establish trusts consistent with Halakhic principles if they want to pass assets to a surviving spouse while ensuring that the assets ultimately pass to the children or other heirs as defined by Halakhic inheritance laws.

Spouses

Civil law states, upon the death of a spouse, the surviving spouse inherits the estate. According to Torah law, a husband inherits from his wife, but a wife doesn’t inherit from her husband. His sons do. If a widow lays claim via civil law, it can put a family in turmoil, emotional pain, and complex and expensive litigation.

Maternal Relatives

In civil law, there is no distinction between paternal and maternal relatives, but Halakhic views state that no maternal relatives will inherit due to the laws of Judaic inheritance.

The Jewish doctrine may create difficulties if the estate is probated in court. The intermingling of secular and religious laws can create enormous family conflict. Even in the most friendly families, relying on a will that doesn’t conform to Halakhah law can lead to litigation.

Beyond a Will

A comprehensive estate plan that conforms to civil and Halakhah law requires more than a simple will, particularly in high-net-worth families.

• Health care power of attorney

In civil law, this document gives authority to another person to make health care decisions on your behalf if you become incapacitated. Judaic laws require the guidance of a reliable Rabbinic authority of your choice to name a Halakhah-compliant health care power of attorney representative.

• Durable power of attorney

This representative will legally manage your finances and assets not already controlled by a trust. These accounts may include IRAs, 401(k) assets, real estate, income tax filings, memberships, and more.

• Living will, including HIPAA release

A living will instructs physicians regarding your preferences for life-sustaining measures if you are in a terminal or persistent vegetative state. A HIPAA release permits medical personnel to discuss your health with family members and interested parties like Rabbinic authorities.

• Trusts

Depending on your tax situation, an individual with a high net worth may want to establish revocable or irrevocable trusts. Each trust type has advantages that your estate planning attorney can advise you of and discuss how the trust might comply with Halakhah law.

• Charitable giving

Jewish families may wish to consider charitable giving as part of their estate planning. Jewish tradition strongly emphasizes tzedakah (charity), and there are many opportunities for charitable giving within the Jewish community. These community gifts may include supporting Jewish educational institutions, synagogues, and other Jewish causes.

• Memorial instructions and legacy statement

Jewish families have a strong sense of tradition to pass on family values to loved ones. Memorial instructions, burial location, and preparations to observe the Halakhah tradition are extremely important. Legacy statements may include lifetime experience and guidance concerning Judaic values that will convey to future generations.

Each family is unique in terms of adherence to Judaism and its laws. Some will follow orthodoxy, while other Jewish families may be more relaxed in their interpretation of doctrine. Working with an estate planning attorney who will personalize and specifically design your estate plan, accommodating varying family issues, is essential.

An Estate Planning Attorney Knowledgeable in Jewish Tradition

An estate planning attorney knowledgeable about high-net-worth Jewish families’ specific needs and concerns can be invaluable in estate planning. They will understand the legal and religious complexities of this blended estate planning and help ensure the family’s estate plan is consistent with Halakhic principles and customs while complying with civil law.

Customized plans reflect family values, goals, and priorities. They often include creating a will, establishing trusts, and developing tax planning strategies tailored to your circumstances.

High-net-worth families may face significant estate and gift tax liabilities without the help of legal strategies that minimize those taxes, including utilizing charitable giving, trusts, generation-skipping transfer tax, and other tax planning opportunities.

An estate planning attorney who understands Halakhah law can provide ongoing support and guidance. They review and update your estate plan and help with probate and trust administration.

This article offers a summary of aspects of estate planning law. It is not legal advice, and it does not create an attorney-client relationship. For legal advice, please contact our office today at (954) 315-1169 to schedule a consultation.