As the years go by, people seem to invest more time into planning events such as weddings and holidays than they do into legacy planning. Granted, planning events can be exciting, however without legacy planning you won’t be able to determine how your wealth and assets are distributed when the curtain closes.
Legacy planning, in its essence, is how you prepare to bequeath your property, assets and wealth to your loved ones after your death. It’s not the jolliest subject matter, but it enables you to leave a lasting impact on the lives of those you love.
You may have heard the term estate planning before – legacy planning is a more holistic approach; it’s all about managing your total wealth while you’re alive in order to distribute your estate exactly the way you want to.
What’s in a legacy plan?
A legacy plan will factor in assets such as:
- Real property
- Business interests
- Personal property
- Retirement accounts
It might also contain personal effects, such as family heirlooms, history of the family, accumulated life lessons and wisdom that need to be passed on between generations. It’s a common misconception that legacies only contain financial boons and assets. Though those assets do make up the bulk of a plan, it’s important to recognise the impact of sentimental items that you want factor into your legacy. You may also want to include other important information, such as passwords to important accounts.
Why is it important?
For a start, legacy planning brings you financial peace of mind. By having everything in order, you’ll have one less thing to worry about and you get on with life.
Secondly, it helps you to prepare for the unexpected. One part of legacy planning is the creation of an In Case of Emergency (ICE) pack, which your family can turn to if the worst were to happen. This way your loved ones can have access to everything they need to make sure your wishes are carried out in a proper manner.
It also prevents any unintended beneficiaries. Defining exactly who gets what prevents your estate from falling under intestacy regulations and therefore avoids the extra costs which can often be incurred when an estate enters into intestacy.
Finally, one of the most important reasons for legacy planning is that it eliminates family messes. You’re effectively stopping arguments before they start by choosing who controls your finances and assets should you be unable to do so. Legacy planning also allows you to make plans that are personal to each beneficiary of your estate. You might want to make arrangements for a loved one with health problems or set up a trust for someone who is better off not inheriting a lump sum.
It’s all about getting your wishes across accurately and delivering your legacy in exactly the way you see fit.
The bottom line is that legacy planning eliminates uncertainty and it makes sure that your beneficiaries are taken care of in a way that aligns with your values. It’s vital to be prepared for the future and legacy planning is the perfect tool for achieving peace of mind, both financially and emotionally.
For more information on how to plan your legacy, don’t hesitate to get in contact.