Legacy planning can be a very important part of wealth management. Unfortunately, there seem to be some misconceptions and confusion surrounding what exactly it is.
In this post, we’ll discuss:
- What exactly legacy planning entails (and how it is different from estate planning)
- Why getting a head start on it is a really good idea
- How to start planning
What Is Legacy Planning?
To define legacy planning, let’s start with estate planning. Estate planning is a little more standard. It is simply ensuring that – in the case of death or becoming otherwise incapable of handling your estate – you have a plan in place to distribute your assets.
Legacy planning is also about distributing your estate and assets after you pass on. But it looks at the bigger picture of how you want your legacy to be defined. Legacy planning enables you to give the wealth you’ve accumulated a sense of purpose.
Why Legacy Planning Could Be Right for You
Legacy planning is sometimes dismissed as a pompous activity, something sought after by control freaks with inflated egos. But we’re here to say that this is an unfortunate misconception.
Yes, legacy planning requires that you undergo a sometimes uncomfortable examination of your accomplishments and the special things you’ve contributed to the world – you have to acknowledge things you’ve done worth preserving in order to preserve them.
But this is not a bad thing. If there are certain causes you’ve ardently supported, advice that you think would be particularly helpful to future generations, or if you have a vision on how best to preserve your life’s work, a legacy plan is probably a great idea.
By planning it out (while you still have plenty of time left to plan and get the ball rolling), you are ensuring as best you can that the amazing things you’ve accomplished will not be lost with your death. You could even say, it’s your way of giving back – allowing your family, your community, or even the world to learn from your legacy.
How to Start Developing a Legacy Plan
Legacy planning can be a complicated ordeal, but there are two very broad processes that successful legacy planners usually go through: discussing and developing wealth and legacy goals with families and other trusted beneficiaries; and working with trusted advisors to strategize and create a plan.
Talk with Your Family
If you’re seriously considering developing a legacy plan, talking it over with your family is a great place to start.
It can be challenging to discuss these things with loved ones – many families don’t discuss financial matters, and beneficiaries may not have experience managing wealth or estates. In addition, discussing the values attached to the wealth you’ve amassed can require some serious thinking.
Seeing as your family is likely the primary party that will be carrying out your legacy plan, making sure you’re all on the same page is no small matter. But also, ensuring that your family has the proper financial education to take this on is important.
So what it boils down to is one main element: that the family discusses, and agrees upon, the values attached to your wealth. Having a family brainstorm session, wherein you discuss as a group what values you associate with your wealth, and how best to pass those values onto posterity, is a great place to start.
Work with Trusted Advisors
Strategic planning is almost always a good idea, and legacy plans are no exception. If you have amassed enough wealth to consider a legacy plan, you’re probably very savvy financially.
However, you should still work with a professional when creating a legacy plan. In matters this personal, it is incredibly helpful to bounce ideas off of an objective advisor, especially if it’s someone you trust. This becomes even more true when your family is involved, and emotions can get in the way of objectivity.
At Saddock Wealth, we have a team of highly skilled professional advisors who have a wealth of knowledge and experience in this particular field. We’re able to look at each individual piece that goes into your legacy planning process and create a big picture.