Almost everyone has heard of estate planning – but have you heard of legacy planning? Legacy planning takes the concept of estate planning one step further, allowing you to incorporate your morals, beliefs and ideals into your comprehensive estate plan. Legacy planning also allows you to make a difference through the gifts you leave in your estate plan to loved ones and charities. You don’t have to be wealthy to engage in legacy planning; however, the more you have to leave behind the more important it becomes to leave behind more than just assets. Legacy planning is your chance to leave behind your vision and your hope for generations to come. How, exactly, is legacy planning different from estate planning though? The answer lies in subtle changes to the way in which you create your plan and in the goals you set for your plan.
Basic Estate Planning
The primary goal of most estate plans is to create a roadmap for the distribution of estate assets upon the death of the Testator, or the individual creating the plan. Ideally, a basic estate plan will also include additional components such as:
- Incapacity planning
- Medicaid planning
- Tax and probate avoidance
- Retirement planning
A basic estate plan has the ability to protect and grow assets during your lifetime as well as ensure that those assets are available to provide for loved ones after your death. Legacy planning takes these basic concepts one step farther.
Your Guiding Principles
Chances are good that you have lived your life with a set of guiding principles. These principles have likely been interwoven into every aspect of your life, including your family, your business, and even your friendships. You have also likely tried to pass these principles down to future generations along the way. Although you may not think of your estate plan as another opportunity to pass on those principles, it can be if you engage in legacy planning.
Ideals, Morals, Beliefs, and Philosophies
Within your overarching principles you undoubtedly have a number of personal ideals, morals, beliefs, and philosophies that are important to you. These too have likely had an important part in forming who you are and how you live your life. How can you include your ideals, morals, beliefs, and philosophies into your estate plan? By focusing in creating a legacy plan instead of a basic estate plan. There are a virtually limitless number of opportunities to incorporate your ideals, morals, beliefs, and philosophies into a legacy plan.
Charitable gifting frequently plays a major role in legacy planning. For some, their church or other religious affiliation is at the center of their desire for charitable gifting. Others may focus on things such as the environment, politics, space exploration, animals, or any other cause that is important. If philanthropy is part of your life now, why shouldn’t it be part of your estate planning? Legacy planning makes that happen by focusing on how you can continue to give to the causes that matter to you long after your death. Common ways to accomplish this include:
- Direct gifts – a direct gift is a one-time gift to a charitable organization to be used as the organization sees fit.
- Charitable trusts – establishing a charitable trust allows you to have more control over how your assets are used. The trust terms you create will dictate how, when, and for what purpose the assets held by the trust can be used. If the environment is important to you, for example, you might create a trust with trust terms that only allow distributions to companies/organizations that have a record of environmentally friendly practices.
- Foundations – creating a foundation is the ultimate in philanthropic giving. It also allows you to involve future generations in your gifting. Your children, for instance, could lead the foundation into the future, using principles and guidelines you establish now.
You also have other opportunities to express and pass on your beliefs and ideals in a legacy plan by weaving them into gifts to loved ones. For instance, you might create an educational trust that will only allow distributions if a beneficiary is pursuing specific areas of study and/or attending specific schools.
If you wish to do more than simply pass down things, legacy planning is for you. Please join us for one of our upcoming seminars. If you have additional questions or concerns about creating your legacy plan, contact the experienced North Carolina estate planning attorneys at Clarity Legal Group® by calling (919) 484-0012 to schedule an appointment.