No one wants to think about their own death or the death of a loved one, but it’s a reality that we all must face. While the prospect of facing our mortality is daunting, it’s also an opportunity to plan ahead and prepare for the future. One way to do this is through legacy planning.
Legacy planning is a proactive approach to preparing for the future by setting up your financial and legal affairs to ensure that your loved ones are taken care of. It’s about ensuring that your wishes are carried out after your death and that your family has a set plan to follow.
What is Life and Legacy Planning?
Legacy planning is the process of preparing how your property and assets will be distributed after your death. If you’re thinking – this sounds a lot like estate planning – you’re not wrong.
The two are, essentially, the same thing, although some financial advisors believe that legacy planning covers a wider breadth of planning.
Why is Legacy Planning Important?
When it comes to legacy planning, you are limited only by your imagination. Even if you don’t have a lot of assets, you can still create a plan that will benefit your family.
No matter how big or small your estate, legacy planning is important. Here’s why:
It Allows You to Set Up Your Own Estate Plan
This is the most important part of legacy planning.
With an estate plan:
- Your assets can be distributed as you see fit.
- You can establish a trust or designate guardians for your minor children.
- You can name a power of attorney and a health care proxy.
- You can also choose to give money to specific charities or causes.
An estate plan is an important part of your financial legacy. Without it, the state will decide how your assets are distributed, and you may not like the state’s decision.
It Allows You to Protect Your Family
Legacy planning allows you to protect your family from any financial burden. You can give them access to assets or provide for their education.
It Provides Tax Benefits and Money Savings
When you pass away, your estate can have a significant tax burden. If you plan ahead, you can reduce the tax burden on your estate and your family.
Having an estate plan can also help bypass the probate process, which can cost up to 10% of the estate.
It Provides a Peace of Mind
When you plan ahead, you can rest peacefully knowing that your family is taken care of. You don’t have to worry about your assets being distributed after your death.
The First Step: Legacy Planning Services
You know that it’s important to plan for the future, but how do you get started? Is legacy financial planning something you can do on your own, or do you need help?
The future is too important to put at risk, so it’s in your best interest to work with a financial advisor or estate planning attorney to set up your plan. The American Bar Association can be a valuable resource for finding an attorney who specializes in estate planning. Legacy planning is an important part of any estate plan. By creating a plan, you can determine how your assets are distributed and ensure that your wishes are carried out after you pass away.