When discussing how to leave a legacy it is important to think about more than just saving money through avoiding taxes and administrative costs or building wealth through wise investment strategies. Those who want to leave a legacy for their family must construct an estate plan that also prepares the eventual beneficiaries for the responsibility of taking on wealth and handling it wisely. Below are five steps that will help you and your family do just that.
Family Meetings: Changing family dynamics make it very important to hold semi-regular family meetings to discuss financial and other family goals. In these meetings you can discuss concerns and objectives for family resources, retirement, educational expenses, liquidity of assets, and emergency funds or plans.
Consider all your Assets: Multi-generational planning often focuses on the big assets, but often overlooked are the family heirlooms and those items that give more meaning than just finances. When planning for your legacy make sure to include planning not just for businesses, retirement accounts, and other investments, take the time to plan for the items that have more sentimental value too.
Address both individual and overarching needs: When discussing your estate plan with your extended family, you should take into consideration any concerns that individual family members have, such as special need individuals, long-term care issues, healthcare, and charitable goals. Also, make sure that if you have a family business, the family agrees as to how that will be managed from generation to generation. Family businesses are very difficult assets to keep up over several generations and take very careful planning.
Look at different estate planning strategies: There is not one way an estate plan should be carried out. Your family should examine all your options before committing to a certain course. Most plans consist of a few basic building blocks such as a revocable trust, a will, health care documents, and a power of attorney, but many families with larger amounts of wealth are concerned about asset protection from possible law suits etc. These concerns can also be mitigated using certain estate planning strategies.
Be Consistent: To keep your estate planning strategies working, valid and well-fit to your family’s needs, you should regularly review your decisions to keep up with changing law (and more often) changing family circumstances.
Find a Professional
It is important to find a professional to assist you and maybe even a team of professionals. A team consisting of a financial planner, estate planning attorney, and a tax professional can assist you in making decisions about your legacy. To include us in your team, please call at (951)304-3431.