3 Ways HNIs Can Manage Assets to Lower Risks During Life Transitions

Life and its vicissitudes can shift even the most robust individuals from their planned courses. One might assume wealth makes everything comfortable. However, more wealth also brings additional responsibilities and stress of handling it all. Tensions can escalate significantly during transitional moments in life, both personally and professionally.

As a high-net-worth individual (HNI), you probably already have a diversified investment portfolio. Dividing your assets across real estate, equities, and alternative investments is a classic risk-lowering strategy. 

However, planning for and managing transitions in life requires an adaptive strategy that considers market movements and also builds safety nets.

1. Reexamine Your Risk Profile In Case of a Divorce 

Marital conflict and eventual divorce are a distressing life transition that can significantly impact the financial health of an HNI. For high-net-worth individuals, divorce can conjure ugly realities involving the division of assets. To safeguard your assets and optimize high-net-worth asset management in such cases, reassessing the risk profile becomes imperative. 

After a divorce, new financial risk areas can emerge, warranting management. For example, if an ex-spouse holds intimate business interests and partnerships, you will need cautious examination to ensure equitable distribution. At the same time, you don’t want new assets to face future liabilities. 

These considerations will become more complex if you have built an estate plan that involves your spouse and children. These plans are a blessing for smooth asset transfer to loved ones, sans financial and tax burdens. But a divorce can compel you to reconsider everything.

It can be helpful to work with experienced financial analysts who specialize in managing transitions. Richard P. Slaughter Associates notes that HNIs should develop an adaptive asset management strategy that aligns perfectly with their current financial journey. Transitions, such as marital changes, may warrant a completely personalized strategy to align financial resources with changing life goals.

2. Prioritize Pre-Sale Planning Before Exiting a Business

Deciding to sell a business you own is undoubtedly a pivotal point in your life. Each business holds meaning in a founder’s life, no matter how many they may be involved with. 

A lack of pre-sale planning before finalizing a deal can expose you to several risks. Missed opportunities. Capital gains taxes. Repercussions on your future investment strategy.

The ideal scenario is planning for an exit 2-5 years before you take the leap. It will give you and your team sufficient time to lower risk exposure. However, understandably, this may not always be possible. A viable solution is to explore alternatives that allow you to minimize additional or unexpected costs from the sale.

For example, as an HNI, you can explore a Grantor Retained Annuity Trust (GRAT) to reduce taxes. You can establish GRATs for a few years, with negligible gift tax liability upon their expiry. The goal should be to diversify across asset classes so your business sale connects well with your long-term legacy planning. 

Working with experts can help you stay updated with changing regulations in this space, such as recent legislation that may restrict GRATs to some extent. PwC reports that the proposed legislation plans to deter the use of these trusts for tax avoidance.

3. Safeguard Assets When Coping With a Health Crisis

A life transition that catches the best of us unaware is ill health, manifesting as months or years lost to recovery and healing. HNIs, despite their wealth, are not insulated from the vagaries of life. 

Coming down with a health crisis can potentially undo years of asset management unless you manage the risks adequately. For one, a medical emergency can quickly erode wealth. It can also impact one’s ability to handle a large estate, which limits the growth capacity of assets.

Some individuals and families consider insurance-linked financial instruments to improve the volatility of their portfolio. Select insurance policies allow partial withdrawals that can contribute to health costs, without requiring you to sell other assets.

Another approach is Asset Protection Structures, such as trusts that shield your assets from creditors. These structures can protect you from lawsuits as well, preventing the expense of costly litigation at a sensitive time when you are already dealing with a lot.

CapGemini’s World Wealth Report 2025 finds that the world’s HNI population is increasing by almost 3 percent. Of this, younger individuals are set to receive over USD 83 trillion by 2048. 

These Gen X and Gen Z individuals are likely to be more open to diverse investment options. They may also display openness to exploring new avenues that protect their wealth in case of adverse circumstances. These generations are not strangers to the global pandemic and the possibility of another health crisis of this scale.

For high-net-worth individuals, or HNIs, managing assets during transitions is essential for lowering risks and safeguarding one’s wealth. Moreover, a change in the status quo should not mean that wealth should cease growing. Adopting an adaptive asset management strategy can create the balance and resilience required at these times.