8 Tips for Leaving a Legacy
Leaving a legacy is one of the goals of estate planning. Many people want to leave a legacy when they die. They want to make sure their loved one are provided for financially. They also want to make sure family traditions are passed down from family member to family member.
You work hard for your assets during your lifetime. You spend your entire life building a future and possibly a family. Of course you deserve to know what will happen to those assets when you die. But, the only way to make sure your wishes are known, and carried out as you would like, is to create a will.
Now some of you are probably scratching your head. You are wondering, ok, I know I need a will. But, how do I leave a legacy through my estate planning?
Great question. I am going to give you eight tips for how you can leave a legacy when you die. Ready?
Step One: Know The Value of Your Assets
The first step is knowing the value of your assets. What do you own. How much is your property worth?
The best way to start, is by making a list of all your assets. For real estate, list the address, county and tax value. If there is a mortgage on the property, list the name of the mortgage company, amount of mortgage and how much is still owed.
For investments, you will want to list your financial advisor if you have one. You will also want to list all of your stocks, bonds, mutual funds and other investments such as IRAs or Annuities. For each investment, list the estimated value.
For bank accounts, list the account numbers, bank where the accounts are located and approximate value. You will want to state whether those accounts are joint with right of survivorship, transfer on death or solely in your name.
If you have vehicles, list the make, model and year of those vehicles. Same goes for any motorcycles, boats, rvs, etc. If you have titles for those vehicles, state where the titles are located.
Do you own a business? If so, list all interested owners or partners. State whether or not you have a buy sell agreement in place. Also, list approximate value of the business and any debts or liabilities.
If you have life insurance, list the company, policy number and death benefit. Same for any retirement plans or pension plans you may have.
Step 2: Make a Will
A will is the only way you can decide who will inherit from you and what each person will inherit from you. With a will, you control what happens to your assets when you die.
If you do not have a will, your state has a statute in place called the Intestacy Statute. The Intestacy Statue determines who will inherit from you when you die without a will.
The Intestacy Statute does not care if you like who it has decided who the state has determined will receive your property. The Intestacy Statute is not concerned about fairness. You see, the Intestacy Statute is only concerned with how people are related to you.
So, if you want a say in how your property will be distributed at your death, you need a will.
Step 3: Choose the Right Personal Representative
When creating a will, you will need to name a person who will serve as your Executor. An Executor is a person who will take your will to probate court, distribute your assets according to your will and pay any debts owed by your estate.
The duties of an executor can be overwhelming and stressful. Therefore, you should choose your Executor wisely.
Sometimes people will name a family member or a friend. Sometimes, they will name an attorney or accountant.
No matter who you name, it is important that you discuss this decision with your chosen executor. Make sure he or she understands what is involved. Most importantly, make sure he or she is comfortable with serving as your Executor.
Step 4: Write a Legacy Letter to Your Loved Ones
Many people want their loved ones to know how much they were loved. Sometimes, a family member may want to share stories about his or herself, memories and family traditions.
You may want to express your wishes for your children or grandchildren’s future. By writing a letter, you are able to communicate your values and beliefs to your loved ones.
You can write a single letter or a letter to each person. By writing such a letter, your loved ones will have a letter they can treasure forever. Your letter can become part of your family history.
Step 5: Plan Your Funeral
Did you know that you can plan your funeral in advance? You can leave detailed instructions as to your wishes when you die such as:
- favorite music to be played or sung;
- who do you want to speak on your behalf?
- what type of flowers do you want?
- do you want memorial donations made in your name?
- who do you want to be invited?
The possibilities are limitless. You can even write your own obituary or eulogy.
Step 6: Know When to Update or Review Your Estate Plan
Yes, we all know we should have a will. But, how many of us know that a will is not a one and done situation?
If your life circumstances change, you should consider updating your will. What type of life change could necessitate updating your will? Check out the following examples:
- change in marital status (marriage, divorce, death of spouse);
- minor children are now grown;
- your wealth has substantially increased or decreased;
- birth, adoption, marriage or death of a child;
- moving to a different state;
- tax law changes;
- health changes.
Even if you have no significant life changes, it is always advisable to review your will every three to five years. Why? Well, you want to make sure you still want to leave your property to the same people. You also want to make sure your executor is still willing and able to act.
Step 7: Get Life Insurance
Life insurance is one way you can leave your heirs with a tax free gift. Life insurance can help your loved ones pay bills.
Many couples buy houses based on both their incomes. If one spouse dies while a mortgage is still owed, a life insurance policy can pay off that mortgage.
Life insurance is an important part of estate planning. Life insurance can make sure your loved ones are financially provided for after you die.
Step 8: Give Your Family The Gift of Time
While you are alive, give your family the gift of time. Visit with your family. Talk about shared memories or your own childhood memories.
Share family stories with your children and grandchildren. Talk to them about what life was like for you growing up years ago.
Bring out pictures to share with your family. Invite them to share their favorite photos with you.
Life is short. So, we need to make the best of it while we are still alive. Make each moment count. Each memory you build is a treasure that will become a part of your family legacy for generations.
