Legacy planning entails a financial strategy that will prepare you for bequeathing your assets to a next of kin or loved ones after your death. Your assets may include real estate, retirement accounts, investments, business interests, insurance policies, and items such as collectible items, paintings, or the family jewels.
It’s never too early to start your estate planning. Most financial advisors recommend starting as soon as you become a legal adult and then updating your plan every few years. Here is an explanation of legacy planning, why you should plan, when to do it, and the benefits of hiring a professional legacy planner.
What is Legacy Planning?
In general terms, legacy planning entails the process of developing a strategy to make sure that your assets work for you as you want them to during your later life and that they are distributed according to your wishes after you have passed on. A legacy includes many levels of planning including the following:
- Legal measures: such as Power of Attorney, which allows a chosen person to manage your finances and healthcare if there comes a time when you are unable to do so for yourself.
- Estate planning: this allows you to provide instructions regarding how you want your home, business, and any other assets divided up between your loved ones and next of kin.
- Refining: an important aspect of legacy planning is that it allows you to express the familiar, historical, and emotional aspects of your legacy. So that your personal values are passed on to your loved ones as well as your material wealth.
Why is Legacy Planning Important?
You may think legacy planning is not a big deal. Why not leave it to your family to sort out after you’re gone? Legacy planning is an important thing to do for the ones you love. Planning ahead will ensure that your family members can focus on their grief instead of descending into arguments over who gets your assets. You can use legacy planning to make things simple, to set up a will to distribute your belongings, or to transfer your assets to a trust.
Legacy Planning by Age
It’s important to begin legacy planning as soon as you can, but of course, this will depend on numerous factors including your economic background, your education and career choices, and your familial setting. Here are some tips for legacy planning from your 20s onwards by decade.
- 20-30 years of age: Once you reach the age of 18, you are legally an adult, and you can take responsibility for your own financial and healthcare decisions. At this point in your life, it’s worth obtaining a Healthcare Directive. This is a document in which you can specify any actions that may need to be taken to protect your health, should you become unable to give directions yourself. You should also create a Power of Attorney, in which you name someone to make other life decisions for you if you cannot.
- From age 30 to 40: By now, you may own some financial assets such as a home and car. You may also have started a family or be planning to. Now is the time to start planning your legacy with your children and spouse in mind, so that they will be financially protected in the event of your death. At this time in your life, you should talk to an attorney about making a will. It should include who you wish to inherit your assets, who will handle your estate, and who will take care of your children if your spouse is not able to. During this time in your life, you should also talk to your parents to make sure they have a legacy plan in place.
- From age 40 to 50: By now you should have your legacy plan in place. If you have not yet completed it, now is the time to become proactive and get your estate in order. If you
Have already completed your legacy plan, you can now spend some time reviewing the details and making sure that it is exactly how you want it laid out.
How Can a Legacy Planner Help Me?
Planning your legacy can seem overwhelming, particularly if you are still young. However, you can make it much easier for yourself by seeking advice from a legacy planner. A legacy planning attorney is one who specializes in estate and legacy planning affairs. These attorneys have the same qualifications and certifications as other attorneys, but they have specialized in this field and are up-to-date with all the necessary knowledge and requirements. A legacy planner can help you in several specific ways, for example:
- Creating a trust: Placing your money into a trust is an alternative to bequeathing money without any conditions. For example, you may wish some of your money to go to a grandchild, but for the specific purpose of paying for college fees.
- Providing multiple payments: If you want your assets to benefit younger members of your family, you may want your inheritance to be divided into regular payments. You can add specific conditions such as how much the payments should be and how often they are made.
- Business management: If you have spent your lifetime building a business, you can give your legacy planner specific instructions as to how you want it to be managed in the future.
- Specific heirlooms: If you have personal items that have monetary or sentimental value, you may want to bequeath them individually to your loved ones. This will help you continue family traditions and prevent disputes between your family members.
How Much Will a Legacy Planner Cost?
Legacy planning services can be expensive because they are highly specialized. However, even if the fees are high, you will be able to rest easy, knowing that your assets are being handled exactly as you wish. You can rest assured that your estate in is good hands with an attorney.
Typically, when you explain your wishes to a legacy planner, they will explain their fees to you upfront. Fees will vary depending on the lawyer and the services you choose. For example, you may be charged an initial meeting fee and then at an hourly rate. There may also be fixed fees for the drawing up of a will or arranging a trust fund. The best thing to do is shop around and get several quotes so you can compare rates. Bear in mind that if you see a legacy planner early in life, there will also be long-term costs for the maintenance of your plan.
Don’t Wait Until It’s Too Late
Legacy planning for the future will not only give you peace of mind now, but it will also make it easier for your loved ones to manage your estate after you have passed. You can’t start planning your legacy too soon.
The earlier you get your assets in order, the easier it will become to make adjustments to your legacy plan as you go through life and if there are significant changes, such as the death of your spouse.