Legacy

Feeling Really Wealthy? Then Why Not Give Back?

By Rocco Carriero, MBA, CRPC®

Like the businessperson who financed the new hospital wing or the charity worker who devoted their life to building health clinics in a third-world country, each of us has the opportunity to leave a legacy. We each also have the opportunity to create a legacy to benefit our family or society. It does not have to be a grandiose pursuit. It does not even need to be a huge sum of money. By engaging in legacy planning, we get to have a say in how we will be remembered and how some or all of the assets we have accumulated will be utilized. All that’s required is a dedication to help make life a little bit better and some advance planning.

First, some background: the word “legacy” derives from the Latin “lēgāre,” meaning to bequeath, pass on or entrust something in the hands of another — a dignified gesture which has come to mean making a lasting contribution of more than monetary value.

Most of us think of legacy planning as gifts left by one’s parents, such as the family business, the house they grew up in or other prized possessions. But the gifts you value the most usually can’t be measured in dollars; gifts such as a work ethic, a sense of family responsibility or generosity, and community spirit. These are the true gifts we hope to pass to our children and grandchildren. This is the type of legacy that can truly make the difference in how our own children and possibly society at large will experience the benefit of our labor and some of the wealth it created.

People often have different feelings about wealth. What took one generation years to achieve may seem trivial to the next. Consider the successful businessperson who never had the chance to attend college. She may wish to help someone else realize that dream or may never want her own grandchildren to have to make that same sacrifice. One of the first steps in creating your legacy is to express your feelings about wealth and its responsibilities well in advance and make your goals known as well as your reasons for establishing them. In other words, communicate your values and desires to your family and build a team to help implement the legacy plan. Your wishes should form the basis of your legacy plan. The strategy behind a sound, effective legacy plan should be to clearly establish and identify your objectives, what might be described as your “family philosophy,” and the means to implement the strategy.

Involving a financial advisor can help everyone involved to understand your motivations and take your legacy planning seriously while providing objective professionalism to the experience. The advisor should be able to furnish the necessary framework to formalize your plan with whom you consider to be the key players in helping to carry out your legacy, which ideally will almost always have financial as well as benevolent ramifications.

While a well-structured estate plan should be your first step, it should not be the last one. This not only takes into account the values and beliefs you hope to pass on but by utilizing the services of an advisor, a range of potential tax issues, gifting and charitable-giving guidelines, trust and family-foundation and funding concerns can be addressed. Having a financial adviser structure and manage these aspects can release much of the anxiety that goes into this process and helps ensure that your wishes are not only honored but managed in a professional and efficient manner.

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