What Can I Do to Make My Estate Plan a Legacy Plan?

“The reality is that your traditional estate plan will result in a 70% chance that your wealth will be lost by the second generation, and a 90% chance that your wealth will be lost by the third generation.”

You may have a traditional estate plan that includes a last will and testament, powers of attorney, a health care proxy, living will and perhaps a revocable living trust. You may even have an irrevocable life insurance trust that owns your life insurance policies to avoid potential estate taxes and to protect the policy proceeds from creditors. Finally, you’re considering transferring a minority share of your business to a family trust. This will move assets out of your estate, mitigate estate taxes and protect the assets from creditors. However, you have some questions about whether this traditional estate planning will be successful.

Forbes’ recent article, “How To Turn Your Estate Plan Into A Legacy Plan,” says that perhaps you’ve also heard that legacy planning is the solution to your problem.  However, you are worried about the expense. If you create a legacy plan, does it mean you’ve wasted time and money? No, it doesn’t. The documents you’ve already prepared for estate planning, can most likely be used and incorporated into a more effective legacy plan. Let’s look at how to turn an estate plan into a legacy plan.

Form A Legacy Team. This effort takes a team. You need a team of professional advisors working together to move you towards success. A legacy team will typically begin with three main areas of expertise: legal (estate planning attorney), tax (accountant) and wealth/financial planning (wealth advisor). From there, the legacy team may expand, based on your needs and circumstances. Your team’s makeup will depend on you and your family’s specific needs and circumstances.

Get A Legacy Mindset. Think “process” versus “plan.” Traditional estate planning is often seen as complete, once estate planning documents have been prepared and signed. However, the reality is that after you’ve created legal entities and a structure for your estate and/or legacy, you’re just at the start of the process. The legacy plan is a recipe for your success and the framework through which your legacy is going to thrive and grow.

Educate Yourself on What You’ve Already Created. With your legacy team in place and with your legacy mindset, understand what your existing estate plan does and doesn’t do. Review your estate plan and determine if it distinguishes between legacy and non-legacy assets (which almost always should be handled differently on your death). You also need to plan for your life and how to build the legacy you ultimately want to leave behind through specific assets in your estate.

Design and Execute the Plan. Your legacy plan is about establishing and committing to a process that lets you and your legacy team remain proactive and intentional in implementing your legacy plan. The right process and legacy team will ensure that your plan evolves with you, and they will move you forward to achieve your greatest legacy and success.

Reference: Forbes (August 22, 2018) “How To Turn Your Estate Plan Into A Legacy Plan”