A great way to create a family legacy plan is to talk to your heirs about your expectations. Involve them in the decision-making process, and make sure they are ready to assume responsibility if something happens to you. A trust can protect your assets, while an estate plan can ensure your heirs will be ready to take over. If you are considering using a trust, be sure to communicate your wishes to them in advance.
Creating a legacy plan
When it comes to creating a family legacy plan, communication is critical. Clients are often concerned about leaving substantial assets to their children or grandchildren but also want to ensure that these gifts don’t spoil the kids or encourage poor work ethics. With proper communication, they can ensure that the gift they leave behind will be valuable and will have a lasting impact on their family. Below are several strategies for family members to discuss.
First, define family values. A family legacy plan is an opportunity to establish a family mission statement. The mission statement should define what your family values are and how you intend to live those values. This is important for both financial planning and family legacy planning. Make sure to involve your children and your spouse in this process. It can be fun and informative. Communication is also crucial for identifying your family’s core values.
Trusts can help protect your assets
Whether you want to leave your inheritance to your adult children or pass it down to your grandchildren, trusts can protect your assets. A testamentary trust, for example, becomes irrevocable upon the owner’s death and allows your beneficiaries access to the funds at a predetermined time. A Totten Trust, on the other hand, pays out your assets to the beneficiary at the time you specify.
Creating a trust can be somewhat complicated, but naming the Trust yourself can make it easy to remember. Use a family name and the date of establishment with the words “Family Trust.” This format leaves little room for misinterpretation and makes it easier to manage. The date can also serve as an organizational tool. The family name is the easiest to remember, and it is easy to include a family member’s name if you need to.
Communication with heirs is key to ensuring heirs are ready to take the reins
Communicating about family legacy planning with heirs is critical to preparing them for inheritance and preserving hard-earned wealth. While discussing personal finances with family members can be uncomfortable, avoiding such conversations may do more harm than good. Many mismanagement statistics are attributed to the failure of communication with heirs. Communication with heirs about family legacy planning is vital for ensuring that your children and grandchildren are prepared to take the reins of the family legacy planning process.
