Who are you?
What are you made of? What do you believe? What are your accomplishments, great and small? When you leave, what are you going to leave behind? And to whom?
These are some tough questions to start a discussion about financial planning. But before you can move forward with the creating a well thought out plan, you need to know where you are, who you are, and what you want to leave behind. When you have a good understanding of this, you will start to know what your legacy will be.
A large part of your legacy is how you transition your wealth to your loved ones. This will be your last statement to your loved ones. You have the ability to take good care and set up the transition smoothly, or you have the ability to make it a costly and time-consuming mess. Do you know of someone who had a huge mess when someone else died? Were countless hours spent trying to square everything up, find out where all the accounts were? Where the safety deposit box key was kept? Where was the will? Did they even have one?
Hopefully the “someone” you know wasn’t you. And hopefully you will be the “someone” others will remember who had their act together and everything in place.
Remember, the last memory and statement you make to your loved ones is how smoothly and uncomplicated your estate transitions. I don’t find it comforting at all when someone says, “Oh, I will be dead anyway, so I am just going to let my heirs fight it out.”
Generally, that is exactly what they will do!
Colleen Barney and Victoria Collins, in their book Best Intentions ask this powerful question. “Does your estate plan pass on wisdom and lessons you would if you were still here?”
As you consider your legacy and how your assets are going to transition to loved ones, take time and answer the following questions:
• Who will distribute my assets?
• Who will inherit my assets?
• How are they going to be distributed?
• Do I give money outright or flow (schedule) to my heirs over time?
• If they are going to be scheduled, what are the “triggering” events?
• Who will be the guardian for my minor children?
• Who will be my guardian?
• Do I want the guardian to also have control of the money?
• Do I want my heir to have use of the assets but no ownership, thus limiting their liability?
In my personal plan, if my wife and I die while we have minor children in the house, we have designated one person to raise them, another person to manage the money, and a third person to distribute that money. We have intentionally created this process because we want the person who’s caring for the children to not be burdened with money matters and vice versa. Each task is burdensome enough. Additionally, we are trying to make certain that the same person who is caring for them isn’t also managing the money with the ability to distribute the money. We are trying to build in “checks and balances” for their care, if we are not the ones doing the caring.
Whatever your plans, whatever your goals, you will leave a legacy. It can be one of frustration and angst, but it should be one of understanding and information. Creating a financial plan will go a long way to leaving the legacy you intend on leaving!