Legacy

Ask yourself these questions:

  • When you are gone, what legacies have you left?
  • What have you done to make the world a better place when you’re gone than when you arrived?
  • What was your contribution to the world?

Legacy planning is about passing on not only your assets, but what you know, your values and life lessons.  It is about taking the opportunity to revisit your family values and vision and ensuring those values and visions are passed down to the next generation and future generations.

Unfortunately, the idea that estate-planning or legacy planning is all about tax reduction often causes people to divert attention from important Legacy planning discussions to focus attention on estate tax planning services.

Legacy planning should be thought of in terms of creating and maintaining a family dynasty or creating a Legacy though philanthropy.  Many families who may have only modest assets are rich in culture, tradition and values.  It is suggested that less than 10% of the planning people do with their estate has a direct impact on legacy planning.

Philanthropy is an important part of leaving your Legacy as well as a very effective tax planning tool.  A friend of mine, Enzo Calamo says “financial success or strong business success doesn’t make a strong family, but a strong family can build a sustainable business which will bring financial success”.  And even a modest donation to a local foundation can having a lasting positive impact upon the community you live in.

Remember this:  If your wealth changes your life for the better, you are successful. But, if your wealth changes the lives of others for the better, you’ve created a legacy.

Here are some items you can do to start planning your Legacy:

  • Prepare a will – create a strategy for giving
  • Plan to leave a gift
  • Be Specific on who, what, when, where and why
  • Consider your assets and what is the best use for them
  • Make sure you have an alternate beneficiary for your Will and he/she is aware of your wishes
  • Utilize existing life insurance to give to a charity (major tax advantages here)
  • Consider new life insurance as a gift
  • Memorial gifts of assets
  • Encourage others
  • Talk to an advisor

Where do you begin?

Before you develop a plan, you’ll need to gather some information, and give thought to a number of key questions (see below). The goal is to come to some conclusions on important issues and draw a clear picture of your financial and non-financial goals.

Key Questions and Decisions

  • What am I most proud of accomplishing over the course of my life?
  • What are the top 3 impressions that I want my family and/or my community to associate with me?
  • Is my family prepared to assume full responsibility for the business and financial matters currently under my management?
  • If not, could they with specific learning and development?
  • Does my family have the skills and the confidence to ask the questions and make good decisions? If not, could they with more information or development?
  • Does my family know all of my key trusted advisors? Are they comfortable with them?
  • If I own a business, do family members have an interest and the ability to take over the business?
  • Which family members will share in my estate (spouse, children and possibly grandchildren)? Is there an extended family?
  • Have I provided financial assistance to some family members more than others in the past? Should I consider this when determining how my wealth will be shared?
  • Where a vacation property is owned, do we want to keep this in the family or should it be sold?
  • Do I have philanthropic interests?

The second part of the process is to take this information, and develop a plan that will meet your goals while dealing with your financial situation. For example, if you have complex financial holdings, likely beyond the abilities of family members to manage, your plan should deal with this. Possible alternatives could be simplification or ensuring your family has access to trusted advisors.

As the plan is developed, key components may include:

  • Setting a process for open communication (including how your wealth will be divided and why),
  • Building financial and investment knowledge and skills,
  • A will, which is reviewed and updated regularly,
  • Assessing whether your family will be capable of managing your financial affairs when the time comes that you can’t, and determining the best course of action if they will need help,
  • A determination of the tax issues that will arise on death, and setting a plan in advance,
  • Reviewing the tax planning alternatives available to you, including family trusts, testamentary trusts arising after death and other ideas,
  • Reviewing and addressing your insurance and retirement needs,
  • Where a business is owned, ensuring that you have a specific succession plan for the business,
  • Where a vacation property will be retained in the family, a plan for the use of this property, and
  • If you have philanthropic interests, setting a plan to identify the charities you want to benefit while ensuring the plan takes advantage of the significant tax incentives that are available.

If you wish to start planning your legacy, please call and let’s talk about what is important to you.