Leave a Lasting Legacy: How to Leave a Financial Legacy
Retirement Answer Man
Do You Have a Plan of Record?
A good gift to give is a highly appreciated stock or a few shares in a stock that you have unrealized capital gains. Donor advised funds are a great way to leave a legacy if you want to seed money to a charity and then build a legacy of the family choosing where that money goes. 529 plans we've talked about can batch annual gifts so you can get a lot more money in there quickly.
We all want to leave a legacy behind after we pass. The legacy you chose to leave is up to you. This episode is part of a 5 part series on leaving a lasting legacy. Today’s episode focuses on leaving a financial legacy. Make sure to look out for the next episode so that you can learn how to leave a non-financial legacy. Subscribe to 6-Shot Saturday
We also have the answers to several listener questions on this episode and many others. To submit your own questions for me to answer on the show simply hit reply to the 6-Shot Saturday newsletter. If you aren't subscribed, consider signing up to receive a weekly summary of the show along with any helpful links or tidbits that I find interesting and want to pass along. The difference between estate planning and financial legacy
Estate planning and leaving a financial legacy are not the same. There is a difference between the two. When you pass away you will leave behind property, financial assets, and maybe some liabilities. Estate planning is the official process of closing the books on your financial life. If you leave behind more assets than liabilities then those assets will have to go somewhere. The probate process spells out how that will work.
You get to decide how to distribute your assets. When deciding who will receive your assets it is important to analyze the outcomes you are trying to achieve. This process is the way to leave your financial legacy. Planning the outcomes
If you are married, it is important to ensure that your surviving spouse financially secure. That is usually the first consideration in leaving a financial legacy.
Those that have children often choose to leave their legacy to their children, others choose to leave their bequeath to friends or charitable organizations. It is important to remember that if you don’t approve of the financial trajectory that one of your children is on, you don’t have to enable their poor behaviors. You get to choose who to bless with your assets and how. You do not have to support behaviors that you don’t want to support. There are strategies you can use to help your family while at the same time protecting them from themselves.
There are obstacles that could stand in the way of achieving the financial legacy outcomes that you desire. Our culture makes discussing money a taboo subject. This could stand in the way of the outcome you seek. Many people avoid planning their legacy and choose to ignore this type of plan. A lack of planning will mean that you won’t achieve the outcome you seek. Strategies and tools to leave a financial legacy
When you pass you’ll want to transfer your assets as efficiently as possible. While a will is the first tool that you should have in place, many people are surprised to realize that a will is not that efficient since it must pass through probate. There are other ways that you can pass your assets on to those you love without having to go through the probate process.
A living trust is a revocable trust that bypasses probate. The trust document not only states who receives the assets, but it can also define how those assets are managed.
Another way to efficiently manage your financial legacy is through beneficiary designations. By designating your beneficiaries in your IRAs and 401Ks these assets will bypass probate and flow to your chosen beneficiaries. Make sure that you revisit your beneficiaries regularly to ensure that they are up to date.
Listen in to hear tactics you can use to leave your legacy both during your life and beyond. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN PRACTICAL PLANNING SEGMENT
- [3:20] Estate planning and leaving a financial legacy are not the same
- [6:13] What outcomes do you want?
- [10:45] Obstacles to the outcomes
- [12:14] Strategies and tools to use to leave your legacy
- [17:48] Tactics to use to leave a legacy during your life
- [23:12] The ways you could give
LISTENER QUESTIONS
- [26:08] Dave’s question on investment classes
- [35:44] What exactly is the market?
- [40:11] Carl’s question on selling a large position in one stock
TODAY’S SMART SPRINT SEGMENT
- [44:15] Be courageous. Act in the presence of fear
Resources Mentioned In This Episode
LTCI Partners
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Rock Retirement Club
Roger’s YouTube Channel - Roger That
BOOK - Rock Retirement by Roger Whitney
Roger’s Retirement Learning Center
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