You can look at estate planning in a number of different ways. There is the bare-bones approach when you simply try to protect your family in the easiest way possible, and a basic estate plan is certainly better than no estate plan at all.
On the other hand, you could take a more comprehensive approach and engage in the process of legacy planning. When you plan your legacy, you proactively take steps to leave behind a positive influence that will resonate even after you are gone.
Legacy planning is not exclusively about money, but you do have to be aware of the potential impact of the federal estate tax if you are a high net worth individual. This tax can erode your wealth as you are passing it on to your loved ones, because it carries a 40 percent top rate. The tax is applicable on transfers that exceed $5.43 million, but there are things that you can do to preserve your wealth if your estate is in taxable territory.
There are also matters of the heart and mind that can be addressed when you are engaged in your legacy planning efforts. As an elder, you have memories that will die with you if you do not share them. If you record your personal memoirs, you can make your formative experiences available to your loved ones, and you can also educate them about the history of your family.
Taking care of your loved ones from a financial perspective is certainly job one, but charitable giving can also be a meaningful part of your legacy plan. You could consider the creation of a private foundation, and most foundations in the country are operating with less than $1 million, so you don’t have to be a billionaire to establish a foundation.
Charitable trusts can be used as well, and there can be tax benefits realized if you are exposed to the estate tax.
Moral and Spiritual Values
Going back to biblical times, people have shared their moral and spiritual values through the creation of ethical wills. If you leave behind an ethical will that contains your “rules to live by,” your family members will always be able to access your acquired wisdom.
Legacy Planning Report
In this brief blog post, we have touched upon a handful of things that you can think about when you are putting your legacy plan together. If you would like to obtain more detailed information about legacy planning, we have a valuable resource that you can access quickly and easily through this website.
Our firm has prepared an in-depth special report on the subject, and you can click the following link to get your copy: Free Legacy Planning Report.