Legacy planning is a more extensive and holistic approach to estate planning. It involves more than financial possessions, and it can include family responsibilities, core values and more. In other words, this process includes the legacy you hope to leave, rather than only your wealth, property and assets. Learning more about this organizational process can help you decide if it is right for you. The following is a complete review of legacy planning, including what it consists of and how you can get started.
Legacy Planning Explained
Legacy planning defines how you will divide your estate to your loved ones after your death. The document outlines exactly what wealth and other assets are transferred, to whom they are transferred and how they are transferred. This is similar to estate planning but has one key difference, which is the passing on of your legacy. This may include the passing of values, traditions, etc., along with anything else that has personal or real-world value.
Legacy planning is important as it can avoid family conflicts that originate over the dividing of your estate once you pass or the improper distribution of your wealth, real estate and other assets. It also gives you control over your own legacy and the values you behold and wish to pass on to your children and grandchildren.
Financial Assets Included In Legacy Planning
Many have questions in regard to the difference between legacy planning and estate planning. This is because they are similar in the sense they both involve the division of wealth, stock and other financial assets. Every person has a unique list of financial assets, although some of the more common financial assets include:
- Personal property and assets
- Real estate investment property
- Business investments and stocks
- Wealth and retirement accounts
The financial planner you work with may also utilize tax planning to help maximize the amount you keep after passing away. This gives you an opportunity to pass more on to family, donate to charity and use your hard earned wealth in other ways you desire.
This is for informational purposes only and should not be construed as legal advice. Please consult your legal advisor.
Non-Financial Aspects Of Legacy Planning
What makes legacy planning different from estate planning is the non-financial aspects. Many consider this particular process to be a more modern approach to estate planning. It may include the following non-financial aspects:
- Core values
- Community involvement
- Family responsibilities
- Family history
- Sentimental belongings
Of course, the main priority of is to divide the person’s wealth, property and physical assets to their loved ones. But it may also include a non-financial component to focus on values and non-financial involvements that are important.
The Benefits Of Legacy Planning
Every client has a unique experience with legacy planning. Many view it as an exciting time to ensure their estate is properly bequeathed to their loved ones. Others view it as a difficult, albeit necessary, process that involves many tough decisions.
Regardless, legacy planning helps avoid family conflicts that may occur if there is no directive on how the person’s estate is to be divided. It can also ensure you are able to reduce the amount you are required to pay in taxes, ensuring more economic stability for your loved ones.
How To Get Started With Legacy Planning
You can get started with legacy planning by hiring a financial planner, particularly one who has experience with wealth management. They can guide you through the process and ensure a smooth process. Before doing so, however, it is helpful to establish what you wish to gain from the overall process. In doing so, consider asking yourself the following questions:
- How do you want to divide your wealth, property and other assets?
- Would you like to donate any of your wealth or assets to charity?
- What professionals do you need in the process? (i.e. tax advisors, financial consultants, lawyers, etc.)
- Are there any medical decisions (advanced directives) you would like to include?
As mentioned, the primary role is to divide the wealth, property and assets you possess to others. These are difficult decisions one must make, especially when considering factors such as charity donations. It is also worth considering any medical decisions you may have to make during legacy planning. Establishing an advanced directive ensures you get the medical care you desire if you become unable to decide for yourself.
Talk To The Professionals At Campbell Wealth Management
Here at Campbell Wealth Management, we help our clients live a comfortable and stress-free retirement by assisting with concerns such as legacy planning. If you would like to learn more about retirement planning and want to speak with one of our wealth management advisors, then reach out to us by calling 703.782.5058 or request a consultation online today for more information. We can answer your questions, address your concerns and help you determine if you should take the next step forward.
