The Importance of Legacy Planning
Article courtesy of Jason Bosley
Planning your legacy can be a stressful challenge to undertake, however, covering the basics of legacy planning will help to relieve some of that stress that most every worker will come to endure when it comes time to retire. Planning your legacy may also be viewed by many as being something only for the extravagantly wealthy – though this couldn’t be farther from the truth. It is vital that everyone, regardless of their financial prestige, is able to complete a legacy plan for their loved ones.
Legacy planning is aimed to help ensure your wealth and assets are properly transferred and realized by your beneficiaries. Your plan m ay reflect a lifetime of your effort and hard work, and may provide the peace of mind that your wealth will be passed on to your selected heirs. There are a number of benefits in crafting a legacy plan for yourself. If you don’t plan your legacy, it will likely be done for you once it’s too late, perhaps by the IRS, lawyers and the courts.
Your assets may be in the form of liquid assets, stock holdings, property, or a retirement account like an IRA or 401(k) – more accounts can mean a more complex issue if you don’t create a legacy plan for your loved ones. Not having a plan can cost even more money and take additional time, leaving your loved ones to wait and receive less of your legacy than if you had a clear plan. Also, planning your legacy will help your assets be transferred with little delay and little confusion. Instead of leaving decisions about how to distribute your estate to your family, attorneys or financial professionals, preserve your legacy and your wishes by drafting a clear plan at an early age. Below, we’ll cover three basic tips for creating a legacy plan.
NOT ONLY FOR THE WEALTHY
When some people hear “legacy plan,” they may envision someone of extravagant wealth. However, that couldn’t be farther from the truth. Financial considerations are a central element to legacy planning, but personal property, such as family heirlooms, are also an important part of many Americans’ legacies. In essence, legacy planning is giving what you have to whom you want, the way you want, when you want and with the least amount of taxes and expenses possible. Depending on what your legacy contains, you may have to employ the services of an attorney, but working with a financial services professional should be considered during this part of planning.
KEEP GOOD RECORDS
Keeping all of your financial statements and paperwork together is the third legacy planning tip. Having multiple retirement accounts from a number of employers you’ve worked for over the years is one example of how your financials become spread out and more complex over time. In addition, your personal property, bank accounts, investments accounts, insurance policies, mutual funds and everything else in between seem to become more numerous. Reviewing your finances will help you and the professionals you have at your disposal to gain a clear focus of exactly what you actually own.
DISCUSS YOUR INTENTIONS WITH FAMILY
Providing access to a trusted family member or loved one is important as well, and will give you extra peace of mind should catastrophe ever strike. Most crucial family discussions of this nature are about money, but really come down to values.