Leaving a legacy through the passing assets today and after your death is a process that requires correct planning and execution. With the recent Tax Cuts and Job Act of 2017, updated tax codes, and an ever-changing political environment, legacy planning requires consulting with multiple professionals in order to pass assets without financial consequences. Legacy planning should always be a team effort involving an attorney, tax specialist, and your financial advisor if planning involves securities assets, or will benefit more than one generation, non-profit, or other entity. Transferring wealth has no ‘right or wrong’ way, but is best the way that you prefer.
Regard your wealth transfer as ‘leaving a legacy for others’, which should include protecting others while you pass on your values and financial dreams for them. Some people consider transferring wealth to benefit their children and their children’s children, and if the wealth is great enough, endowments can be created to benefit many people. The complexity of the wealth transfer increases with the number of assets you own, the people it is being created to benefit, and the length of time you want the assets to last. Legacy wealth transfer may become complex due to the types of assets you own, just like a family can be complex due to different personalities.
Not all people wait until the end of their life to start legacy planning. It can be a part of your life today as none of us know when our lives will end. Important things to consider are how much control you want to have, to understand issues from not distributing assets among family members, and if assets should transfer now and the remainder at death. Transferring wealth through estate and legacy planning should not be a ‘quick decision’ decided in only one appointment. Not considering all consequences can be costly.
Once your legacy plan is created talk to your family about it. Invite open dialog, and address their concerns so they can understand the reason behind your decisions. Let them know the resources of information that helped you decide to leave a legacy may help eliminate concerns when family members know you consulted legal, tax, and asset professionals. You may not choose to disclose specific information regarding the wealth transfer, which is your decision. Informing family members that there is an estate plan in place many times eliminates concern regarding asset transfer.
If you have any questions about legacy planning, feel free to reach out to schedule a meeting.