When it comes to safeguarding your wealth and securing the future of your loved ones, the importance of planning cannot be overstated. However, beyond basic estate planning, there exists a more holistic approach – legacy planning.
This blog post sheds light on legacy planning, how it differs from basic estate planning, and the reasons why you should consider it.
What is Legacy Planning?
Legacy planning encompasses more than just the financial assets you leave behind. It’s about the impact you make, the values you instill, and the memories you create. It’s your life’s story, communicated through your will, trusts, personal artifacts, and even an ethical will, which is a personalized letter conveying your values and life lessons.
How Legacy Planning Differs from Basic Estate Planning
Basic estate planning focuses primarily on ensuring your assets get passed on according to your wishes upon your demise. It includes wills, powers of attorney, healthcare directives, and potentially, trust establishment.
On the other hand, legacy planning adopts a more comprehensive approach. It includes all elements of estate planning and goes a step further to incorporate strategies that dictate how your wealth will influence the lives of future generations, society, and even the world.
Why You Should Consider Legacy Planning
- Fostering Family Harmony: Legacy planning promotes open communication with your family about your wealth distribution intentions. This transparency reduces potential disputes and helps to maintain family unity after you’re gone.
- Passing on Values: More than just transferring wealth, legacy planning allows you to pass on your cherished values and traditions. You can set up educational trusts, establish family foundations, or contribute to causes you hold dear.
- Minimizing Taxes: Legacy planning also involves tax planning. By leveraging tools like charitable trusts, family limited partnerships, or lifetime gift exemptions, you can reduce the tax burden on your estate and maximize the benefits for your heirs and the causes you support.
- Preserving Your Life’s Story: Through an ethical will, personal memoir, and/or a recorded video message, you can share life lessons, values, and hopes for future generations, keeping your memory alive.
Steps to Effective Legacy Planning
Step 1: Clarify Your Goals
What do you want your legacy to be? Are there specific causes or values you wish to support? Start by answering these fundamental questions.
Step 2: Inventory Your Assets
Take stock of all your assets, both tangible (like real estate, financial investments) and intangible (like values, life lessons). This overview will guide your legacy planning process.
Step 3: Create Your Legacy Plan
Work with a legacy planning attorney to develop a plan that aligns with your goals, incorporates tax-saving strategies, and communicates your wishes effectively.
Step 4: Communicate Your Plan
Discuss your legacy plan with your family. Transparency can prevent potential misunderstandings and disagreements down the line.
Step 5: Regularly Review and Update
As your life circumstances change, so should your legacy plan. Regularly review and revise your plan to ensure it continues to reflect your wishes.
Get Started Today!
If you are ready to put a meaningful legacy plan in place, we are here to help. You can send us a message to set up a consultation, and you can schedule an appointment at our Glastonbury or Westport, CT legacy planning offices if you call us at 860-548-1000.
Mr. Karpe is licensed to practice law before the courts of the States of Connecticut and Colorado, the U.S. District Court for Connecticut, the U.S.District Court for Colorado, the United States Supreme Court, and the U.S. Tax Court. He is a member of the Connecticut and Hartford County Bar Associations as well as the Estate and Probate Section of the Connecticut Bar Association. In addition, he is a member of the American Academy of Estate Planning Attorneys, the National Academy of Elder Law Attorneys and Planned Lifetime Assistance Network of Connecticut.