Legacy Planning

While much of financial planning is focused on investing and growing wealth, it is critical to have a plan for what happens to your assets at the end of your life. Neglecting this area of planning can put undue hardship on heirs, and possibly cost your family a lot of money. For many years, estate planning focused on minimizing the impact of the Federal Estate Tax, but that is just a fraction of the planning. Done well, your estate plan should be a reflection of your wishes, a gift to your family, and a legacy that your heirs can be proud of.

The Basics
An estate plan doesn’t need to be complicated, but everyone should have a baseline plan in place. Simple things like titling assets correctly, ensuring the correct beneficiaries are listed for accounts, and having both healthcare powers and durable powers of attorney are important items for everyone regardless of their net worth. Many families should also make use of revocable living trusts so that they can control assets without being subject to the probate process which is public, expensive, and time consuming.

Going Beyond – Leaving a Legacy
Perhaps you have accumulated enough wealth that your financial independence is secure, and you begin to think about future generations. The process can be daunting without a guide, but asking yourself some basic questions will help frame your thinking:

  • How much do we want to leave our children?
  • Will our kids be ready to handle this wealth?
  • Are we subject to Estate Taxes? Do we care?
  • Would we like to plan for multiple generations, not just our kids?
  • Are we ready to discuss this with our heirs today?
  • Would we consider a meaningful gift to charity as part of our estate planning?

The answers to these questions and many more help define what is important to you, and shape the strategy for your estate plan. Without proper planning, tax and legal concerns can take a big bite out of your legacy. Or you might leave a real administrative challenge to your children as they try to sort through your affairs. The good news is that once your desires are known, an estate plan can be put in place and you can continue to amend and change it over time. There are certain techniques that utilize irrevocable decisions, but those should only be implemented when the results fit your goals and the benefits outweigh the loss of flexibility.

For those amenable to making charity part of their estate plan, the results can be quite powerful. The combination of tax benefits and the impact you can have in your community can be truly meaningful. In light of our desire to make a difference, leveraging the power of planned giving is some of our favorite work. We have helped generations of clients define what is most important to them, identify the causes they care about most, and design strategies to maximize the impact of their generosity.

We welcome the opportunity to help our clients define their legacy goals, preserve their wealth, and leave a meaningful inheritance to their heirs and the “greater good” of the community.

Financial Advisors do not provide specific tax/legal advice and this information should not be considered as such.  You should always consult your tax/legal advisor regarding your own specific tax/legal advice.