Deep Dives
Planning Your Legacy

Legacy planning is preparing to not only bequeath your assets after your death, but an opportunity to define what wealth really means to a family so that financial wealth and a family’s core values are passed on to future generations.

Planning Your Legacy
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July 5, 2022

Legacy planning is preparing to not only bequeath your assets after your death, but an opportunity to define what wealth really means to a family so that financial wealth and a family’s core values are passed on to future generations. Actually planning your legacy is usually pretty low on people’s to-do lists. You have to think about your own death, family relationships, what stuff you have and what you want to happen to it… it all seems complicated. But think of it this way- you spend decades building your net worth, both financially and personally, so who gets your wealth should be planned out just as carefully.

First, let’s address the timeline of when to do what. Early in your career, maybe after you’ve had kids or bought a home, basic estate planning is probably a good place to start. This would include a will with guardian instructions, financial power-of-attorney, and medical power-of-attorney. These can be filled out relatively inexpensively through NoLo.com or TrustAndWill.com. If you have a more complicated estate, you will want to consult with an estate attorney rather than doing it online.

Later in life as you approach retirement, a full legacy/estate plan should be completed with the aid of an estate attorney. Below we list the key things to consider:

Experiences, memories, stories

Everyone gets caught up in what to do with financial assets, but is that the most important part of your life? Or is your story, experiences, and memories? We urge you to consider leaving a diary, video, or journal to your loved ones. You don’t have to be a superhero to make an if-you’re-watching-this-I’ve-already-died video, but you are a superhero! Make one. You’ve built an amazing life. Recount family history, stories, traditions, your personal thoughts and dreams- anything and everything you want to pass along to the next generation. Your life in your own words is priceless.

Instructions and wishes

Circling back to some of the critical documents to get in place at an earlier age, a medical Power of Attorney vital. Your will should be as specific as possible concerning end of life wishes. You should also consider living arrangements, will you be living with family, or will you live in assisted living or a nursing home? Dictate clear instructions for executors/trustees and family members for funeral, burial/cremation, and other related preferences.

Important personal possessions

You will need to decide where you want your personal possessions with high emotional and/or financial value to go. To prevent issues, discuss with the members of your family what is important to them, and to you, and decide who will get these key items. 

All the other financial and real estate assets

We want to figure out the most tax efficient way to pass your assets on. An estate attorney can add a lot of value here. High value individual assets should be appraised, and the recipient named. If the assets will not be given to someone, you will need to state your plans for them- whether or not they will be sold and the profits added to your estate, given to a museum, etc. For financial assets, trusts, and life insurance, make sure they are properly titled and beneficiaries updated. A CPA and financial attorney can help fully set up your plan.

For residences and real estate, make your wishes known- whether they will be sold, passed on to someone else, donated, etc.

Legacy planning is a process that involves thinking about what wealth means to you. Define your goals and core values and pass them on to your family members. Identifying your objectives and communicating them is the key to successful legacy planning.

Related Deep-Dive
Essential Estate Planning Documents
Estate Planning is not just for the wealthy. A properly executed estate plan can greatly reduce stress and administrative hurdles for your grieving survivors should something happen to you. Planning your estate in advance will help make sure your savings and other assets are distributed as you intend.
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David Barta, CFA, CFP®