Inheritance and Estate Planning Basics
Take a few minutes and reflect on this: If you could open a portal and ask a deceased ancestor three questions, what three questions would you ask? Why were these questions the ones you chose? If one of his future descendants were to visit you, what three questions do you think they would ask? The success of sites like Ancestry.com and MyHeritage.com demonstrate our culture’s desire to understand its relationship with its ancestors, but the question remains: are people only looking for names and images? When you come across some short news headlines and census records, will it have answered all your questions? Is your search complete? Through conversations with advisors, clients, and observations throughout history, I’ve learned that stories are what people appreciate. Each person has a story, therefore each person has a legacy. Still don’t think you have a legacy to share?
Merriam-Webster online states that the word Legacy is a noun and means: something passed down or received from an ancestor or predecessor or from the past. So we know that he has a story and now we also know that if he passes on that story, he’s passing on his legacy. Put simply, Legacy Planning is the thoughtful process that organizes and preserves you and your stories for future generations. Those seeking to live a life of purpose will find that legacy planning and estate planning can be combined to guide and direct future generations, while helping you preserve your hard-earned assets and ensure they go to where you want them to go after your death.
By deliberately charting your generational impact, you can save your family and heirs considerable time, expense, and potential complaints by eliminating inheritance uncertainty and sharing a valuable life lesson. In the legacy planning process, you are given the opportunity to teach and offer hard-earned life experiences that helped shape your life and guide your destiny. The old saying, “Give a person a fish, it will feed them for a day, but if you teach them to fish, they can eat for a lifetime,” is a common theme recurred to daily by many successful, health-conscious clients. well-being and preparation of their future generations.
There are numerous studies showing that those who have written plans outperform those who do not. Take a moment and contemplate the effect this principle can have when applied across generations. Michael Hyatt, a planning and productivity leader, astutely observes, “I’ve met few people who have a plan for their lives.” How many families do you know that have a 100 Year Plan in writing, also agreed upon and actively implemented? Seventy percent of Americans do not have a will. Unless you want to potentially donate a substantial portion of your estate to Uncle Sam, it’s time to join the thirty percent that do. Although writing a will, or the appropriate instrument recommended by your adviser, may not be fun to think about, a little foresight now will save your heirs and loved ones enormous inconvenience in the future. The planning process of gathering thoughts, stories, ideas, and traditions will be rewarding and will inspire many new thoughts and possibilities.
In this series on Legacy and Estate Planning Basics, you’ll learn how to:
– Identify generativity in oneself and in others and the steps to increase it;
– Implement the 4 Basic Building Blocks of a Strategic Legacy Plan;
– Understand the basics of wills, trusts, probate, bequest declarations and charitable giving;
– Establish a power of attorney, living will and long-term care agreement; Y
– Minimize the impact of inheritance and probate taxes on your heirs.
Warren Buffett, famed investor and director of Berkshire-Hathaway, has drawn much attention and praise for his comments about inheriting his own children: “The perfect amount of money to leave your children is enough money for them to feel like they can make anything, but not so much that they couldn’t do anything.” In Buffet’s case, that amount has reportedly been $10 million. Buffett’s attitude to empower the next generation without stifling his drive to create, contribute and be self-directed has been embraced by the middle class, young professionals and baby boomers alike. The goal is to avoid the old adage, “from manga to manga in three generations.” Only by planning for your legacy and his estate now can you be sure that all of his wishes will be known and respected when he passes away.
