You may have heard the term “legacy planning” and wondered how it differs from traditional estate planning. Though there is no universal definition of the term “legacy planning”, it can be explained in a way that may convince you that you need to create your own legacy plan instead of a traditional estate plan.
During the course of your lifetime you have likely worked hard, invested prudently, and saved wisely. The assets you have accumulated as a result will hopefully support you during your golden years and maybe even still be around to pass down to future generations when you die. Those assets, however, are not all you have to pass down. You have also likely formed values, beliefs, and philosophies over the years that have contributed to your life’s success. You may also want to pass these down to future generations. A legacy plan allows you to do just that. Legacy planning focuses on incorporating these values, beliefs, and philosophies into your overall estate plan in a way that they are also passed down to children, grandchildren, and other beneficiaries when you die.
This can be accomplished in a variety of ways. Throughout your estate plan there are opportunities to incorporate your beliefs and values. For example, if education is something that you value you might set up a trust fund that is only intended to be used to pay for higher education expenses. Maybe you feel strongly about children having a parent home during their formative years. If so, you might create a trust that allows a stay at home parent to do just that – stay at home. Monthly distributions could go to the beneficiary until the youngest child starts school, for instance. On the other hand, if you believe in the entrepreneurial spirit, you could include trust terms that encourage a beneficiary to venture into the world of business as a small business owner. If philanthropy is something that is very important to you now, there are numerous ways in which you can continue to give in your estate plan.
Your legacy is something that is unique to you. The important thing about legacy planning is that it allows you to pass that legacy down to your loved ones by incorporating the important aspects of your legacy into your comprehensive estate plan.