Merriam-Webster provides two definitions of the word “legacy”:
- A gift by will, especially of money or other personal property
- Something transmitted by or received from an ancestor or predecessor or from the past
Thinking about your legacy can feel daunting. How do you want to be remembered? What will you leave for others, both tangible & intangible? Many often defer thinking about their legacy until late in life (or not at all).
The powerful truth: you will leave a legacy. The question is, what legacy are you leaving? Here are some helpful questions to consider:
What is important in my life?
Your life journey includes many important moments, events, and decisions that you have made. What people are most important to you? What causes are you passionate about? How do you want to have an impact on those people and organizations? This will take time but start documenting your thoughts.
How do I want to be known?
Imagine a production crew creates a documentary of your life. They plan to release it to theaters nationwide. What do you want them include from your past? What do you hope will be included in the future? Think about the people you want to impact and the experiences you want to have. Create a plan to do so.
Who do you want to support?
You may have family members or others that depend on you: emotionally, physically, and/or financially. If you passed away, how would their support continue? You care deeply about your loved ones. A carefully crafted estate plan will ensure this care continues after you are gone.
How will you continue to support your loved ones after your passing?
The answer to this complex question is often: “it depends”. Financially speaking, your heirs each have different life circumstances. Age, mental & physical health, maturity level, and financial acumen should all factor into your decisions. Leaving assets outright to someone that is not in a position to manage them could be very detrimental to their well-being. What you intended to be a blessing could become a nightmare.
An alternative to an outright bequest is a trust agreement. The inheritance would be held in trust for the benefit of your heir(s). You would appoint someone with experience (a “trustee”) to manage the assets and make spending decisions according to your specified wishes. The trustee could be a trusted individual or a corporate trustee. Designating a corporate trustee is preferred when there is not an easily identifiable, qualified person(s) to serve, or if you do not want to place the burden of trusteeship on someone.
How do I execute my plan?
Pioneering aviator Antoine de Saint-Exupery said that “a goal without a plan is just a wish.” The same is true of your legacy. You may have specific wishes and desires, but without action, they are just thoughts that will disappear into the void.
A trusted financial advisor is a valuable resource to assist you with legacy planning. More specifically, a CERTIFIED FINANCIAL PLANNERTM is trained to educate you on how to transition your wishes into a comprehensive, executable plan. Contact your CFP® professional to start your legacy journey.
