“People often put off creating a will or estate plan because they want to avoid making difficult decisions or having stressful conversations with loved ones. The idea of death, money, and splitting possessions can create conflict. However, it doesn't have to be that way.”
With a few exceptions, most people find planning for their legacy, creating an estate plan and thinking about their own mortality to be unpleasant. In response, they procrastinate, often leaving their families with financial and legal disasters. However, according to a recent article from The Street, “Planning Your Legacy: More Than Just Finances,” there are four concepts you can use to shift how you think about planning your legacy, and make it a productive and meaningful task.
Values and Life Lessons. Because so much of estate planning focuses on financial aspects, people often forget that some of the most valuable gifts for them to pass on to the next generation are experiences and memories. Your years of life have given you lessons and stories that your children or their children will want to know. To pass this valuable asset along, you can use something as simple as pen and paper or make movies of yourself. Remember that no detail is too small and things you might not think are important, may be instructive and memorable for generations to come.
Instructions and Wishes. An estate planning attorney can work with you to make sure the necessary documents are created to carry out your instructions or wishes. First, do you have the correct insurance in place? Have you named a health care power of attorney? Do you have a living will? Give thought to what you want to happen in the event of a life-threatening event. Do you want extraordinary measures taken to prolong your life? Be as specific as possible, so your wishes will be followed. You don’t want any grey areas or challenges to your desires.
You should also consider what kind of living arrangement you’d like as you age. Would you want to live in an assisted care facility or could a loved one make room for you in their home? The more thought you can give to these topics in advance, the better you can plan for life’s eventualities.
Be sure that your estate planning attorney creates clearly written instructions for your executor and any trustees. If you can bear it, also give instructions for your wishes regarding your funeral, including burial, cremation, services, etc.
Personal Possessions with Emotional Value. The jade ring your father left you may not have any value in the jewelry marketplace, but if you want to pass it along to a certain son, then you’ll want to put that into a letter that specifies who should receive what. Family squabbles often arise over possessions that have more sentimental than market value, so have some conversations with family members in advance to try to avoid any kind of infighting.
Financial Assets and Real Estate. Your estate planning attorney will be able to help you get your assets in order. Inventory any high-value objects, like art, antiques or jewelry and decide what should happen to them. Have them appraised and make sure you have the correct insurance coverage in place. Next, what will happen to your primary residence upon your death? Do you own rental properties or other pieces of real estate that need to be conveyed at your death? If your family has a vacation home, consider whether or not it will be sold, or converted to a corporation with shares held by your adult children.
Finally, do an asset audit and list all of your accounts, including savings, retirement and investments. How do you want these assets to be distributed? Does charitable giving play a role in your estate plan?
For business owners, the creation of a succession plan or plans to sell the business could take years to complete. Start as soon as you can, so you have time to work out all of the kinks.
Planning a personal legacy is a complex business, with significant emotions. However, once you get started, and if you follow these four pillars, you’ll achieve peace of mind for yourself and for your family. That is a terrific legacy to leave behind to those you love.
Resource: The Street (September 19, 2018) “Planning Your Legacy: More Than Just Finances”