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The Financial Impact of Healthcare Planning for High-Income Families
Explore how healthcare costs can impact high-income households and how strategic financial planning may support tax and estate planning goals.
High-net-worth families face complex financial planning challenges. Learn five common mistakes and how to take a more strategic approach to managing wealth.
5 Mistakes High-Net-Worth Families Make in Financial Planning
Financial planning is especially challenging for high-net-worth families because it often involves complex assets, competing priorities across generations, and the need to coordinate advice from multiple professionals. With so many moving parts, even small oversights can lead to missed opportunities or unintended consequences.
From estate planning gaps to holding an overly concentrated investment portfolio, here are five common mistakes high-net-worth families make—and how strategic planning may help avoid them.
1. Concentrated Investment Positions
A concentrated investment position occurs when a large portion of a portfolio is tied to a single asset, company, industry, or sector. While this can potentially deliver strong returns if that asset performs well, it also heightens exposure to market volatility.
Potential risks include:
- Sharp declines in a single stock or sector impacting total portfolio value
- Missed opportunities for growth in other markets or asset classes
- Limited flexibility to adjust during downturns
Planning Options: Diversification across asset classes or sectors can help reduce reliance on any single investment and may lessen the impact of market swings.
2. Losing Sight of Long-Term Objectives
When decision-making is driven by short-term opportunities or market activity, it can be easy to lose focus on longer-term goals that shape a family’s financial legacy. Wealthy families often juggle immediate priorities—such as managing a business, funding lifestyle choices, or making financial decisions that are emotionally driven —without always anchoring those actions to a broader plan.
A too-narrow focus on the short term can lead to:
- Overreaction to market shifts
- Underutilization of long-term growth strategies
- Being unprepared for future challenges like rising healthcare costs or inflation
Planning Options: Revisiting long-term objectives on a regular basis can help keep short-term financial decisions aligned with broader priorities. Maintaining a long-term perspective can help mitigate potential short-term mistakes.
3. Poor Risk Management
Risk management is a key part of any financial plan, but it can sometimes be unevenly applied across different areas of a family’s finances. Even a well-constructed investment strategy can falter without preparation for the unexpected.
Common gaps in risk planning include:
- No emergency fund for immediate liquidity
- Insufficient insurance for major life events or liabilities
- Lack of diversification across asset types
Planning options: A dedicated risk strategy may include adequate insurance coverage, a reserve fund, and regular portfolio reviews to assess exposure.
4. Inadequate Estate Planning
For high-net-worth families, estate planning typically requires coordination of trusts, tax strategies, and asset ownership structures to support long-term financial goals and reduce the burden on future generations. Even when basic documents are in place, issues can arise when plans are outdated or not aligned with other parts of the family’s financial strategy.
Common oversights include:
- Trusts or family entities that have been created but not properly funded or maintained
- Business succession plans that are missing, incomplete, or not aligned with the broader estate strategy
- Overlooking long-term care planning or healthcare directives
Planning Options: Coordinating estate documents with business succession plans, trust structures, and ownership arrangements can help reduce the risk of conflicts or unintended outcomes during a future transition.
5. Uncoordinated Professional Advice
High-net-worth families often work with multiple advisors—financial planners, CPAs, attorneys—but without coordination, strategies can conflict.
This lack of alignment can lead to:
- Tax decisions that are unintentionally inconsistent with long-term planning
- Investment strategies that don’t account for estate planning goals or distribution timelines
- Missed opportunities to structure charitable giving, business succession, or generational transfers in a more tax-efficient way
Planning options: At EP Wealth, our advisors work collaboratively with your existing team to support a seamless, strategic approach to wealth management.
A well-coordinated financial plan can help high-net-worth families manage complexity and potentially avoid costly missteps. Contact an advisor to get started.
DISCLOSURES
- EP Wealth Advisors, LLC. is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.
- Request an appointment with an EP Wealth Advisor when you have a minimum of $500,000 in investable assets – which includes qualified retirement plans (IRA, Roth IRA, 401(k), taxable brokerage, cash (savings / checking) and CDs. Investable assets do not include your home, vehicles, or collectibles.
- Hiring a qualified advisor and/or financial planner does not guarantee investment success, and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any direct or implied results or projections being represented here will be met or sustained.
- Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.
- EP Wealth Advisors (“EPWA”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented. All expressions of option are subject to change without notice.
- All investment strategies have the potential for profit or loss. Different types of investments and investment strategies involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be suitable or profitable for a client’s portfolio. The risk of loss can never be eliminated even if working with a professional.
- An estate plan is a helpful tool that can assist individuals in managing and arranging affairs in the event of death or incapacity. However, the scope and extent of the plan varies depending on the unique circumstances and desires of the individual client. It is for this reason, that the analysis encompassed herein is not intended to be comprehensive in nature nor should it be interpreted as legal advice. Please consult a legal professional to determine the extent, scope, and the drafting and creation of the appropriate estate documents. EP Wealth Advisors is not in the business of providing legal advice or preparing legal documents. Our review is limited to and in association with Financial Planning only.
