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Legacy Planning

Legacy Planning

When looking to plan your own estate, there are a few options that will maximize the retained value of the estate as it gets passed on through generations. This may include classic approaches to estate planning such as a Last Will and Testament, Trusts, Living Wills or certain insurance products; but a more holistic approach is to use Legacy Planning. Legacy Planning is not limited to charity donations or memorialized locations. With a comprehensive legacy plan, the distribution of the estate, including heirlooms, can be done by way of using an individuals’ values and virtues as guiding principles. Legacy Planning allows for dedicated amounts of an estate to individuals or charitable causes over the course of generations. This not only is a transfer of wealth but also a transfer of wisdom. Legacy Planning increases the amount of control over one’s estate. Often the distribution of the estate may include memoirs or other forms of memories highlighting the spirit and intent of an individual. As the name suggests, a Legacy Plan helps ensure that the wishes and values of an individual are maintained over several generations, leaving behind a legacy that the individual intended.

Keeping Your Legacy Plan Up-to-Date

A common misconception with Legacy Planning is that the ‘planning’ should come later in life when one has more accumulated wealth; unfortunately this is a false assumption. It is important to note that planning ones’ estate can and should be done as early as possible given that the future can be unpredictable. Legacy Plans are designed to evolve as you do; values change over the course of one’s life and that can impact the areas to which  you want to distribute your estate.  It is recommended to reevaluate your estate plan every three to five years, as well as after major life events such as marriage, birth, or death.  More importantly, Legacy Plan should entail looking at saving money for long-term healthcare or the costs associated with a death; both can arise unexpectedly and be potentially costly.

Priority and Advising

If the Legacy Plan includes the transfer of property it is imperative that the parcel of proerty be titled correctly. If not titled properly, the remedy is only through the probate court. To ensure this does not happen the estate  is advised to carefully review all properties. To ensure this does not happen the estate is advised to carefully review all properties. Corporations or limited partnerships may also be setup to help distribute the estate. In order to do this properly and avoid issues with the IRS or being brought to probate court, there must be a well maintained record or bookkeeping of the entities.

When considering a Legacy Plan, it is not only important to consult a professional advisor; an estate planning attorney and a wealth manager; it is also important to talk with and inform family members whom the Legacy Plan will impact. When everyone is aware of the various assets being distributed and to whom, the need to to have to go to probate court unnecessary.

Life Insurance and Charities

An important part of legacy planning is having a life insurance policy in place. While wealth can be invested into stocks or other forms of securities, these kinds of investments may pose a serious risk. As stock markets may bring valuable returns, potential for loss can be just as great. To have a stable fixed return for future generations is a security that cannot be underestimated.

Life insurance can be an integral part of your planning when it comes to retaining wealth as opposed to leaving behind stocks, bonds, or cash which can see reductions by nearly 50% within the first year. The difference with having a life insurance is that when an individual has a policy of for example one million dollars, their heirs will receive, without taxation, the full million dollars. Investing in life insurance provides a stable and fixed return, and in some cases, adds the possibility of additional credits through exposure to a linked market index.

If charity is more in line with the values of the planner, then a charitable remainder trust may be best suited for a portion of the life insurance. With a charitable remainder trust, the benefit after death may be invested at moderate rates, ensuring that the tax-free funds are generating a continued donation. Donations funded from a life insurance policy may even generate more value per dollar than an annual donation and can be a powerful option to consider for your plan.

New Developments

Currently, software for financial and estate planning exist but is behind in the digital age. Often, clients receive reports of their financials but these reports are made for and targeted towards the advisors who manage their assets leaving the client with a less than ideal clear window into the plans they set out to create. An advancement of new technology, with developments in digitization for legacy planning, will be available in the summer of 2019.  These advancements were revealed during the T3 Advisors conference with collaborative efforts between Envestnet, PIETech’s MoneyGuidePro, and eMoney to produce software packages specifically for the financial and estate planning market. These tools aim to bridge the gap in the human-side of the relationship between advisors and their clients. This will be done by providing easy to use functions that would allow them to see different possibilities regarding their estate planning.

For information on how the Marsalese Law Group can provide professional, effective, and efficient legal advice, contact us anytime at 586-915-2184 or

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