Financial Fitness: Your legacy is in your hands

Unless you keep close track of obscure holidays and observances, you might not have known that August was “What Will Be Your Legacy?” Month. Still, you might want to use September to act on one of your most important financial goals: leaving a meaningful legacy.

A legacy isn’t simply a document or a bunch of numbers — it’s what you will be remembered for and what you have left behind for others to remember you. It’s essentially your chance to contribute positively to the future, whether by providing financial resources for the next generation, helping charitable organizations, or both.

To create your legacy, you’ll need to plan. And you can start by asking yourself a couple of key questions:

What are your goals?

When you think about leaving a legacy, what comes to mind? You may want to leave money to help your grown children meet their financial goals. After that, you probably have other goals to accomplish: provide resources for your grandchildren to attend college; set up a scholarship at your alma mater; or give financial support to a cultural, social, religious or scientific group. By listing your goals on paper, even informally, you’ll be taking the important first step in leaving your legacy.

How can you turn your goals into reality?

If you don’t take concrete steps, your legacy just won’t materialize. And the most important step is to create a comprehensive estate plan. This can be quite complex because it may involve legal documents such as a will, living trust, and health care power of attorney. To create these documents, you will need to work with your legal and tax advisors because estate planning is definitely not a “do-it-yourself” endeavour.

You probably shouldn’t wait until you are deep into retirement to take action on your estate plan because developing the necessary documents and arrangements can take a fair amount of time.

And you’ll want to make these preparations when you’re in good mental and physical health. The longer you wait to set up your estate plan, the less likely it will be that you’ve communicated your wishes clearly to your family members, who may end up unsure about what you want and what their roles are in carrying out your plans —and that’s an outcome you certainly don’t want.

Clear communication is essential to developing a successful estate plan. You should not only tell your family members — and anyone else affected by your estate plan — what you are thinking of doing but also with and where you are storing any vital documents such as your will.

By identifying your goals, working with the appropriate professionals to create an effective estate plan, and communicating regularly with your family members and other “key players” in your life, you can do what it takes to launch that legacy.

Deborah Leahy is a financial advisor with Edward Jones.

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