Thinking about a yacht, jet, or luxury property? EP Wealth Vice President, Advisor, Jason Taylor, CFP^® shares what these assets actually cost over time and how to plan for them within your broader financial picture.

Aligning Wealth Planning with Luxury Lifestyle Goals

Money, on its own, has very little intrinsic value. That's an unusual thing for a financial advisor to say, but it's the foundation of how I approach wealth planning. The value of money comes from what it lets you do with your life. A number in a portfolio doesn’t mean much until it's connected to something you actually care about.

That's why the first two questions I ask any client are: What does financial success mean to you? And what do you actually want from your wealth? Whether the answer involves a private jet, a yacht, homes in multiple states, or an art collection they’re passionate about, I want to understand what matters to them before I start looking at the numbers.

Too many people feel like they have to defend a significant lifestyle expense to their advisor. In my view, it should work the other way around. An advisor's job is to fight to find ways to confidently fund the lifestyle decisions that are important to you, while protecting against market risk, inflation, and other factors that could affect your financial future.

An honest feasibility analysis is a critical part of that process. But the starting point should always be what you want from your wealth, not whether you deserve to spend it.

What to Know Before Committing to a Major Luxury Purchase

In this blog, I walk through the approach I use with clients who want to make a major luxury purchase and need to understand how it fits within their broader wealth plan:

• A four-step feasibility test for evaluating whether a purchase is financially sustainable
• How to calculate the true cost of ownership, including maintenance, crew, insurance, and depreciation
• Key tax and ownership decisions, including LLCs, charitable vehicles, and how the way you hold an asset can affect both liability and tax treatment
• How to structure lifestyle spending so you get the most from your wealth during the years when you can enjoy it most 

A Four-Step Test for a Major Luxury Purchase

If you're considering a major luxury purchase, whether it’s a $600,000 car or a $20 million jet, a question you likely have is: can I actually do this? Will it change my lifestyle for the worse down the road? The answer depends on four things, and I walk every client through the same test:

1. Can you fund the purchase and still maintain your lifestyle? If millions of dollars leave your portfolio, can your remaining assets continue supporting your lifestyle and other financial priorities?
2. Can your lifestyle absorb the ongoing costs? Maintenance, staffing, insurance, storage, fuel, and other expenses can turn a one-time purchase into a significant recurring commitment.
3. How long will you realistically use the asset? You may own an aircraft for 10 years rather than 30. That expected period of use matters when determining its value to you.
4. What might you recover when you sell? Consider potential depreciation or appreciation, selling costs, and how long finding a buyer could take.

Once we have those answers, we can model the purchase within the broader financial plan and ask the central question: Is what you receive from the asset worth its true cost to you?

A Four-Step Framework for Evaluating a Luxury Purchase

• Step 1: Assess purchase price impact on portfolio 

• Step 2: Model ongoing costs 

• Step 3: Define asset lifespan and expected exit 

• Step 4: Estimate recapture or resale value 

Considerations for Calculating the True Cost of a Luxury Asset

Getting a clear answer from the four-step test above requires knowing what the asset will actually cost you not only now, but over time. Most clients come into the conversation thinking about the purchase price. But for active-use luxury assets like yachts and private jets, the ongoing costs of ownership are often significantly higher than what people expect going in.

Ongoing Maintenance and Operating Costs

This is often the largest gap between what clients expect and what they actually spend.

• Yachts commonly cost 10–15% of their purchase value annually in maintenance, marina fees, fuel, and general upkeep to remain seaworthy.
• Private jets in the $5 million to $20 million range typically carry $700,000 to $1.5 million per year in maintenance, hangar fees, and related operating costs.
• Collectibles and art typically carry lower maintenance costs, though specialized care and storage expenses can add up depending on the asset.

For example, one of my clients had purchased a $10 million yacht before we began working together and is now spending approximately $1.5 million per year in ongoing costs. This was a figure that, understandably, they hadn't fully anticipated before the purchase. The yacht is a good fit for their lifestyle, but the gap between what they expected to spend and what ownership actually required was significant.

*This example is for illustrative purposes only and may not highlight the experience of every luxury purchase.

Crew, Staffing, and On-Demand Availability

For yachts and private jets, crew costs ongoing whether the asset is in active use or not. Pilots and support staff are typically salaried for both scheduled and on-demand availability. Larger yachts may require a full-time crew including maintenance personnel and, in some cases, a private chef.

If convenience and freedom are part of what makes the asset valuable to you, the people required to provide that convenience need to be part of the financial model.

Insurance and Theft Risk

The more valuable and collectible an asset is, the more insurance becomes part of its ongoing cost. Artwork, jewelry, and collectible vehicles may require more extensive coverage because of theft risk, while yachts and private aircraft can carry substantial insurance costs because of their value and the potential for damage or accidents.

For clients with several high-value assets, I often see umbrella coverage used to provide broader protection across multiple properties and possessions rather than relying only on separate policies for each item. As your collection of assets grows, the cost of that coverage needs to be factored into the overall ownership expense.

As a Vice President, Advisor at EP Wealth, I have access to resources that can help clients evaluate complex coverage needs tied to major luxury purchases.

Depreciation and Resale Value

Resale value is often part of the true cost of ownership. With assets that see active use such as private aircraft and yachts, depreciation can significantly reduce how much of the purchase price you may recover when you sell.

A private jet may lose roughly half its value over a 10-year period. Yachts tend to follow a similar trajectory.

You also need to potentially consider the resale market itself, including how much demand there is for the asset and how quickly you may realistically be able to sell it. The longer an asset sits unsold, the more you're still potentially paying in maintenance, storage, and insurance.

Art and collectibles require a different analysis because future value can vary widely by asset. Some pieces may appreciate, while others may lose value over time. The key is to estimate a realistic resale value and include that figure in the financial model from the beginning for expected taxation, appreciation, and depreciation.

Looking Beyond Sticker Price: The True Cost of Ownership

Here's how the full cost picture comes into focus using a hypothetical private jet as an example:

• Purchase price: $20 million
• Operating costs: approximately $1 million/year × 10 years = $10 million
• Estimated resale after 10 years: approximately $10 million (roughly 50% depreciation)
• Net cost: approximately $20 million over 10 years, or about $2 million per year

Rather than a one-time $20 million purchase, it's $2 million per year for 10 years of private travel access and greater lifestyle flexibility. Is the true financial cost towards your wealth worth the value it adds to your life? For some clients, the answer could be an immediate yes. For others, it's a clear no. There's no right or wrong answer, but when you know the real number, you can then make an informed call with your eyes open.

The information presented is hypothetical in nature and not reflective of a real client or scenario.

Annual Cost Review

The analysis shouldn’t end when you buy the asset. After the purchase, I revisit the cost picture with clients at least annually. I review the asset's current market value, maintenance trajectory, and resale outlook.

I also reassess how the asset fits into the client’s broader financial picture. If its costs or value have changed, that may affect portfolio decisions, retirement planning, or other long-term priorities. My role is to keep those pieces connected so the client can see how the asset is influencing their plan as a whole.

Key Ownership Decisions for High-Value Assets 

• Liability Protection — Hold assets in separate entities to limit personal exposure
• Ownership Structure — LLCs, trusts, business entities, or offshore structures depending on the situation
• Tax Recapture — CRUTs and business entities may help recover a meaningful portion of the purchase price over time
• Residency Designation — Primary residence location can affect annual taxation by 10–15%
• Insurance Strategy — Umbrella policies for broader, more efficient coverage across multiple assets

Key Tax and Ownership Decisions for Luxury Assets

How an asset is held affects both liability exposure and tax treatment. Whether the asset sits in an LLC, a trust, a charitable vehicle, or directly in your name can change what you owe in taxes, what happens if you're sued, and how efficiently you can eventually transfer or sell. I raise ownership structure at the outset of any luxury asset discussion, because these decisions can be far easier to get right before the purchase than to fix after.

Liability Protection Through Separate Ownership

If you own a yacht in your personal name and someone is injured on it, a lawsuit can potentially reach your personal assets. The same applies to damage claims, vehicle accidents, or other incidents involving high-value assets. That exposure is why most significant luxury assets are held through a separate entity like an LLC rather than directly in your name.

Depending on the asset and the client's situation, that entity might be an LLC, a trust, a business, or in some cases an international or offshore structure. Each serves a different purpose, but they share a common function: creating a protective boundary between the asset and your personal wealth.

For example, if an LLC holding a $4 million asset faces a $10 million claim, liability may be capped at the value of the entity rather than extending to everything else you own.

Tax Recapture Through Charitable Vehicles and Business Entities

Ownership structure can create opportunities for tax recapture over the life of the asset. Business entities, location of ownership, and charitable vehicles can all play a role depending on the client's situation.

• Charitable Remainder Unitrusts (CRUTs): An appreciated asset such as a painting can be transferred into a CRUT, potentially generating a tax deduction while the asset remains in the trust and is gradually liquidated over time. This may offset gains from other large expenditures or portfolio activity.
• LLCs and business entities may create additional write-off opportunities depending on how the asset is used and where it's held.

Efficient planning across these structures could feasibly recapture as much as 20–40% of the original purchase price over the course of ownership. In my experience, these kinds of tax-independent ownership structures are widely underused, especially among clients with significant wealth tied up in non-liquid assets.

Multiple Homes May Add Residency and Tax Questions

For clients with properties in multiple states or countries, where you designate your primary residence can have a significant impact on your quarterly/annual tax bill. State income tax rates and estate tax rules vary widely. If your primary residence is in a state with high income or estate taxes rather than one with little or no state income tax, that difference alone could mean up to 10–15% more in annual taxation.

The general threshold: residing in a state for more than half the year typically establishes it as your primary residence for tax purposes. Among CEOs, politicians, and celebrities, it's common to be very deliberate about which property carries that designation. A client might maintain homes in several states but structure their time so that the primary residence falls in a state with more favorable tax treatment.

My advice is always to live your lifestyle first. But if you have flexibility in where you establish your primary residence, that can become part of the planning discussion with your advisor.

Get the Most from Your Wealth While You Can Enjoy It

I’m somewhat contrarian when it comes to my philosophy about wealth planning. I don’t believe you necessarily have to wait for an official retirement date before beginning to live the lifestyle you’ve spent decades preparing for.

For certain luxury goals, timing can be especially important. You may derive substantially more value from an aircraft, yacht, extensive travel, or another active lifestyle expense at 60 than at 90.

The financial plan should reflect that reality.

"Retired While Working"—A Mindset Shift That Can Change the Timeline

My original career path was psychology, and that shapes how I look at the transition into retirement. I’m not only interested in whether the numbers say you can retire. I also think about the psychological shift that comes with leaving a career that may have shaped your identity, routine, purpose, and daily life for decades. At the same time, you’re adjusting to spending differently and figuring out what you actually want from retirement. Making all of those changes at once can be a difficult transition.

Once a client is on track for retirement, I encourage a mindset shift: consider yourself “retired while working.” They may still work 40 or 60 hours a week because they enjoy what they do, but continuing to work may increasingly be a choice rather than solely a financial requirement.

That can change the lifestyle conversation a lot. You no longer have to postpone lifestyle goals until some future date. Instead, you can start giving yourself some of the freedoms now that you always expected to have only in retirement—because you are retired, you’re just also still working.

If the plan says you can do it, you can start now, while you're fully able to get the most out of it. There's no financial reason to wait for a date on a calendar when the numbers already say you're there.

Front-Loading Lifestyle Spending During Active Years

Statistically, the last three to four years of active work contribute relatively little to retirement savings outside of business sales or other large payoff events. Regular contributions during that window have limited time to compound before you begin drawing on your assets. So if you're holding off on a major purchase because you feel like you need a few more years of saving, those years may not be adding as much to your financial position as you think.

That's why I encourage my clients to put the gold in their golden years. Don't be afraid of higher costs in the earlier years of retirement, or even the years just before it. Your ability to travel extensively, to get full use out of a luxury RV or yacht or an aircraft, will diminish with age. If you're going to spend, spend when you can fully enjoy what you're spending on.

In practice, that means structuring the plan so the higher-cost years come first. For example, a client who wants a private jet might plan for 10 to 15 years of ownership starting in their mid-50s, with the understanding that travel will slow down as they age and the asset can eventually be sold. From there, spending shifts toward a more comfortable and less costly pace.

By concentrating the major expense into a defined window of active use rather than measuring it against a full 40-year retirement horizon, the purchase often looks much more feasible than it did at first glance.

Define Success First. Then Let the Planning Team Work on the Details.

I said at the outset that money has very little intrinsic value. What gives it value is what it lets you do with your life. That's why the first step in any planning conversation is to define what financial success means to you.

If that includes luxury lifestyle goals, let your advisory team find a way to make it work. If the goal is building a legacy for the next generation, the plan looks different—but the starting point is the same. Identify what you value, and let your wealth support it.

Don't talk yourself out of what you want before you've even had the conversation. Your advisor should always be straightforward if something doesn't work financially. Personally, I'm in the wonderful position of finding creative ways to fund lifestyle dreams that give your money value. The starting point should be what you want from your life, not what you assume you can't have.

My perspective on this was shaped by a personal experience. When my grandfather was passing from cancer, I had a real moment of clarity in realizing that no amount of money could compare with the value of the people and experiences I cared about most. 

If all you're doing is growing a number, you’re missing what’s most important. My conviction is that wealth should serve the life you want to live—not the other way around.

EP Wealth financial advisors can assist clients considering major lifestyle purchases by evaluating those goals within a broader financial plan.

Learn more about EP Wealth’s high-net-worth wealth management services or connect with an advisor to discuss your goals.

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