Legacy planning is a big part of the financial planning process. We help families develop strategies for taking care of the next generation in many different ways. We often ask clients, “What’s the purpose of your money?” Some family legacies are about money some are about memories and some are fortunate enough to be both.
A financial legacy can be about more than gifting and giving money. It can be about teaching your grandchildren how to have a healthy relationship with money. Teach them financial lessons that will lead to financial independence, self-sufficiency, confidence and competence. Teach them about building wealth not about creating more debt. Now that’s what I call a great legacy.
Before we talk about ways to leave a financial legacy, I must first add a word of caution. Funding longevity is a real issue for many seniors. We are living longer than ever before and the cost of living longer can’t be ignored! If you are thinking about legacy plans think flexibility. Make sure your legacy plans only kick-in once your own needs are met. Make certain that you will run out of life before you run out of money. If your needs are met then by all means think about creating a meaningful legacy for those you leave behind. This financial commitment can be small or something much more substantial based on your financial means.
If you are fortunate to be in a financial situation where you can afford to contribute to the financial needs of your grandchildren here are a few things you can consider and links to some great resources:
- Funding a trust
- Lifetime Giving – Consider ways to take advantage of current laws allowing for generous lifetime gifts before the end of 2012.
- At Death – Planned Giving
- Fund a passion, sporting or cultural pursuit
- Gifting Strategies
- Consider a shared savings strategy, matching their contribution
As always, please contact us for clarification and for more information. Consult with your estate planning attorney for specific recommendations based on your unique situation. If you do not have an estate planning attorney we would be happy to provide you with a referral.
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