You will eventually leave this world.
Don’t pass on unanswered questions to your loved ones.
By Chris Nolt
As Benjamin Franklin said, two things in life are certain: death and taxes. Some people understand this certainty and create estate plans, living trusts, and wills; while others ignore the inevitable and leave behind only stress, questions, and even anger when they pass away.
A wise course of action is to leave behind a legacy plan.
What is the difference between a legacy plan and an estate plan?
An estate plan simply provides a future for your assets. A legacy plan goes further. It transmits your values and wishes, and provides financial instructions.
Most people think the only purpose of an estate plan is to avoid taxes. That’s a valid reason for developing an estate plan, but it’s not the only issue you need to be concerned with. A legacy plan is a better choice because it can convey your aspirations in the following areas:
- Selecting a steward to oversee the distribution of your estate, within the boundaries of your ideals.
- Dictating who will own a family-run business after you, and who will gain from it financially.
- Insulating your assets, business, and estate from lawsuits, outstanding debts, relatives, and past associates.
What might traditional estate plans ignore?
A typical estate plan declares how possessions are supposed to be distributed. But it doesn’t stipulate personal details that can help beneficiaries during an unexpected loss.
A legacy plan, on the other hand, leaves more than just financial information. It articulates your last wishes, life lessons, and ethics that you want to leave behind. It transmits information that will make the probate process easier for your beneficiaries and business at a time of loss and crisis. It also provides important insights that a successor can use to invest an inheritance wisely into the future, ensuring that what you’ve worked hard for will last more than a single generation.
Simply put, with a legacy plan, your business and successors will know what to do after your death, and what you wanted them to do.
Legacy plans take several factors into consideration.
First of all, it considers you. It evaluates your goals, your wishes, and your intentions. The family is the second factor a legacy plan considers. Whatever your family structure, a well-crafted legacy plan will take care of it. After you and your family have been taken care of, financial and tax strategies will be evaluated and established.
Estate plans are oftentimes generic outlines, with no intention to pass along good judgment and the wealth of experience. These values should be passed down along with an estate’s assets. A well-written legacy plan conveys instructions, guidance, and principles that will make a family’s burden more tolerable. Such a situation allows the family to concentrate on resolving business and financial issues.
Chris Nolt is the author of the book, Financial Strategies for Selling a Farm or Ranch and owner of Solid Rock Realty Advisors, LLC and Solid Rock Wealth Management, Inc., sister companies dedicated to working with families across the country who are selling their farm or ranch and transitioning into retirement. To order Chris’ book, visit Amazon.com or go to www.solidrockproperty.com. For more information, call 800-517-1031.