What Is Your Legacy?

How should your family successfully transfer wealth to benefit not just the next but many generations? It starts with the first step: exercising immediate and ongoing financial and investment planning—the process of growing and protecting assets, covering all your household’s present and future financial requirements. The second step is estate planning, the process of designing a sound legal foundation through wills, trusts, life insurance, and other legal instruments to smoothly transfer those assets to intended heirs with a minimum of complications, maximum tax efficiency, and well-defined outcomes. The third step is spending many years consciously and actively preparing a legacy through heritage planning, the process of laying a foundation to prepare heirs to manage both financial and legacy inheritances. With proper attention, heritage planning serves as a vital step to help shape and guide financial and estate planning of current and multiple generations.

At the heart of heritage planning is open communication among family members across generations. It is difficult for eventual heirs to plan their own futures if they do not know what they will be inheriting. However, with frank and detailed information, they can not only manage their own lives and finances responsibly but prepare their own estate planning and legacy planning to benefit their children. It can be said that the greatest gift we give our children is not financial assets but the information and education they need pertaining to the financial assets they will receive, together with a personal family legacy that is the living human heart and soul of any inheritance.

Many people make the mistake of treating wealth transfer as one event rather than an arduous and lengthy journey. Preparing for wealth transfer provides an extended opportunity to instill an emotional legacy: composing and defining values, clarifying intentions for monetary inheritances, and memorializing lifelong learned perspectives that will influence many generations to come. There are reasons families can establish and maintain a multi-generational legacy. It is because they remain strong and close-knit across generations and have many definable elements of success in common that intentionally teach and transmit to succeeding generations this formula as part of their legacy. Trusts and wills are precise legal statements, but they are not personally or sensitively worded, which can easily breed conflict among family members. Occasional family meetings and open discussions familiarize heirs in a personal manner with an estate’s legal documents, such as a trust’s intended purpose, allow for adaptation to changing personal circumstances, and most importantly, immediately address ongoing education needs and sources of discord.

A system of family governance through family councils can be an effective method of preparing succeeding generations for the responsibilities they might one day bear after an intergenerational wealth transfer. Including outside professionals in family meetings, rather than being invasive, can help assure that heirs appreciate and are comfortable with expert guidance. Family members may participate in stewardship duties, such as philanthropic, mentoring, and educating activities to focus on preparing the next generation. This participation in the process of building an inheritance can assure that neither its values nor the family’s ideals will fade away as it passes from generation to generation.

Most of us have a desire to pass on a legacy that’s more than merely financial assets. What we often lack is a formula for success. Heritage planning is really an ongoing cycle of honest and open communications among all connected family members that begins early in the wealth transfer process. Its goal is to transfer not just numbers on account statements and balance sheets but also values, stories, wisdom, life lessons, and intimate family traditions.

Copyright © Mark Wendell 2021 All rights reserved

MD Wealth Partners, Inc. is a Registered Investment Advisor in Westlake Village, California that provides a range of investment and estate planning services. The article is a brief overview and is intended to provide information only. Information is not legal advice. The article covers some important considerations associated with living and posthumous estate planning issues and is by no means comprehensive. The accuracy of the article content is not guaranteed. Always seek the advice of a competent professional when making important financial and legal decisions. The information contained in this article is not a solicitation to purchase or sell investments. Investing involves risks and there is always the potential of losing money when you invest. Specific investments may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an individual investor’s circumstances and objectives.

MD Wealth Partners, Inc.: A personal wealth enhancement boutique for select clients
mark@mdwealthpartners.com
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