Making a difference is important. At the end of our life, we hope to leave this world a better place than when we were born. How we make that mark depends upon each individual’s personal priorities, but most everyone wants to contribute something to society. Leaving a legacy — no matter what it may be — is the opportunity to establish how we would like to be remembered long after we are gone.
One legacy that each individual has the power to leave is a financial legacy. It requires discipline and planning, but it will ensure there is a safety net for your next generation’s financial security, and it may also instill the importance to them of continuing to pass along the same legacy to future generations. A financial legacy is also about protecting your family and showing them how to safegard their families.
When we die, a financial process takes place no matter what. It is extremely important to plan by design, not by default. Uncle Sam is usually the default beneficiary; therefore, it is necessary to minimize his inheritance as much as possible. Careful planning helps establish the safest routes for the benefactor’s finances and allows for a customizable plan. So, whether you want to leave your inheritance to charities or just to your family, planning protects both the benefactor and the beneficiary.
In regards to our children, financial planning can protect them from themselves. Having a plan in place will reduce or eliminate complications. Effective estate planning will not only support them, it will also make them take care of themselves.
In regards to business, financial planning allows a business owner to transfer a company to a pre-determined successor, and it will also protect against creditors. Owning a business is extremely challenging, but the business legacy does not need to end just because the owner passed away.
Whether a plan is customized or simply default, a financial legacy will be left for future generations. There are many options to safeguard it. Life insurance and estate planning are two commonly used methods for protecting the next generation. Young or old, death is unpredictable, so it is important to start planning your financial legacy now.