The Importance of Estate and Legacy Planning
12/20/2024
The estate and legacy planning process allows you to plan for the future and provide for your loved ones on your own terms. But too many people put off their planning, assuming they’ll always have more time.
This holiday season, there is no greater gift you could give your family than a thorough plan that will help protect and guide them even after you’re gone.
If you haven’t set up your estate or legacy plan – or you haven’t updated it in a while – make a plan to check this crucial task off of your to-do list:
In your estate plan, you’ll need to include these critical elements:
Charitable giving is another essential element in legacy planning. If there are causes near your heart, you can continue supporting those causes even after your death. Ensure your relatives understand why specific causes or charities are meaningful to you.
You can include those less tangible things – your values, life lessons, and messages for loved ones – in a family legacy letter to be included with your other estate planning files.
Do you know those beloved stories shared around the holiday table each year? Or the words of wisdom your parents and grandparents passed onto you? Those personal touches can get lost among the many official legal documents of an estate plan, but writing them down is still a meaningful, worthwhile way to care for your family after you’re gone.
Set a time to sit down and discuss your and your loved ones’ plans. Ensure everyone remembers to check their accounts and beneficiaries and make any changes as we enter the new year.
This is also an ideal opportunity to discuss tax-efficient gifting strategies, such as annual exclusion gifts, donor-advised funds for charitable giving, and educational exclusions to help cover the cost of college tuition.
Procrastination:
Estate planning is a topic that many people shy away from because it makes them uncomfortable. However, continuing to delay estate planning can lead to genuine risks and repercussions for your family. If you have loved ones who depend on you in any way, it’s even more critical to organize your estate planning documents as soon as possible.
Failing to Update Plans:
Creating your estate plan is just the beginning. You will likely have to revise and revisit your plans several times.
Failing to update your account information and beneficiaries can mean that your assets are not going to the people you want them to or your loved ones won’t be cared for exactly how you intended. Check your plans often, especially after significant life events, to certify that they still reflect your wishes.
Overlooking Digital Assets:
With our lives more online than ever before, remember to include your digital assets in your estate plans. Any online accounts, digital photos, domain names, email accounts, and even social media accounts can also be part of your estate planning.
Experienced estate planning attorneys will walk you through each document, task, and decision, helping you create a comprehensive plan. They can also help you choose your beneficiaries, power of attorney, and other vital roles, and establish a plan for your long-term care.
In addition to estate planning attorneys, you can work with financial advisors and tax professionals to give you additional perspectives on your plan. Financial advisors, for example, can help you take stock of your assets and how to manage them in your estate. A tax professional, on the other hand, can assist you in determining your tax liability and help you safeguard your wealth from excess fees or penalties.
Take a moment to work on your estate planning together, and ensure that your loved ones and your legacy will be protected for years to come.
This is provided for informational purposes only and not intended to provide investment, tax, or legal advice. We suggest that you speak with a tax or legal advisor about your individual situation prior to making any investment, tax, or legal decisions. Neither the information provided, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. All investing involves risk including possible loss of principal. Past performance is no guarantee of future results.
Steward Partners, its affiliates, and Steward Partners Wealth Managers do not provide tax or legal advice.
This holiday season, there is no greater gift you could give your family than a thorough plan that will help protect and guide them even after you’re gone.
If you haven’t set up your estate or legacy plan – or you haven’t updated it in a while – make a plan to check this crucial task off of your to-do list:
Understanding Estate Planning
Your estate plan consists of key planning documents. It helps protect your assets, minimize taxes, and ensure the efficient transfer of wealth. Having these important documents ready will help you keep your estate out of probate and ensure your wishes are honored.In your estate plan, you’ll need to include these critical elements:
- Will: A will specifies how you want your assets – like money, real estate, and other personal items – distributed after your death. It also appoints guardians and cares for minor children.
- Trust: A trust is an arrangement that allows a third party, or trustee, to manage assets on behalf of a beneficiary. There are two kinds of trusts: revocable and irrevocable. A revocable trust, also known as a living trust, can be changed at any time while the owner of the trust is alive. Irrevocable trusts are considered final and are much more difficult to change. Both options help protect your assets and reduce some taxes, such as income, estate, and gift taxes.
- Power of Attorney and Healthcare Directives: These roles carry significant responsibility. They are directed to make decisions about your health and assets if you lose the ability to do so. Choosing the right people to carry out these roles is a big decision, so make sure that whomever you select is well aware of their responsibilities.
- Beneficiary Designations: Review important accounts, like life insurance, wills, trusts, and retirement plans, to ensure your beneficiary designations are up-to-date. This is especially necessary if you’ve experienced recent life changes, like a marriage, divorce, birth, or death, that could impact who you’ve listed as a beneficiary.
Legacy Planning: Beyond Financial Assets
Your legacy encompasses far more than money and property; it’s about what you hope to pass on to future generations. It’s about values, traditions, and stories of previous generations that you don’t want to be lost over time.Charitable giving is another essential element in legacy planning. If there are causes near your heart, you can continue supporting those causes even after your death. Ensure your relatives understand why specific causes or charities are meaningful to you.
You can include those less tangible things – your values, life lessons, and messages for loved ones – in a family legacy letter to be included with your other estate planning files.
Do you know those beloved stories shared around the holiday table each year? Or the words of wisdom your parents and grandparents passed onto you? Those personal touches can get lost among the many official legal documents of an estate plan, but writing them down is still a meaningful, worthwhile way to care for your family after you’re gone.
Estate Planning Strategies for the Holiday Season
The holidays are a unique opportunity to set aside your routines and unite as a family. It’s also the prime time to make some serious decisions about legacy planning.Set a time to sit down and discuss your and your loved ones’ plans. Ensure everyone remembers to check their accounts and beneficiaries and make any changes as we enter the new year.
This is also an ideal opportunity to discuss tax-efficient gifting strategies, such as annual exclusion gifts, donor-advised funds for charitable giving, and educational exclusions to help cover the cost of college tuition.
Common Estate Planning Mistakes to Avoid
There are a few common pitfalls that can undermine your estate planning success, including:Procrastination:
Estate planning is a topic that many people shy away from because it makes them uncomfortable. However, continuing to delay estate planning can lead to genuine risks and repercussions for your family. If you have loved ones who depend on you in any way, it’s even more critical to organize your estate planning documents as soon as possible.
Failing to Update Plans:
Creating your estate plan is just the beginning. You will likely have to revise and revisit your plans several times.
Failing to update your account information and beneficiaries can mean that your assets are not going to the people you want them to or your loved ones won’t be cared for exactly how you intended. Check your plans often, especially after significant life events, to certify that they still reflect your wishes.
Overlooking Digital Assets:
With our lives more online than ever before, remember to include your digital assets in your estate plans. Any online accounts, digital photos, domain names, email accounts, and even social media accounts can also be part of your estate planning.
The Role of Professional Guidance
Creating your estate plan can feel overwhelming, but you don’t have to do it alone. Working with a professional can make the process much more approachable and productive.Experienced estate planning attorneys will walk you through each document, task, and decision, helping you create a comprehensive plan. They can also help you choose your beneficiaries, power of attorney, and other vital roles, and establish a plan for your long-term care.
In addition to estate planning attorneys, you can work with financial advisors and tax professionals to give you additional perspectives on your plan. Financial advisors, for example, can help you take stock of your assets and how to manage them in your estate. A tax professional, on the other hand, can assist you in determining your tax liability and help you safeguard your wealth from excess fees or penalties.
Conclusion: Securing Your Family’s Future
As your family and loved ones reflect on the past this holiday season, take some time to discuss the future together. Being together is one of the true gifts of the season, as is the peace of mind that comes from knowing your family will be well cared for after you’re gone.Take a moment to work on your estate planning together, and ensure that your loved ones and your legacy will be protected for years to come.
This is provided for informational purposes only and not intended to provide investment, tax, or legal advice. We suggest that you speak with a tax or legal advisor about your individual situation prior to making any investment, tax, or legal decisions. Neither the information provided, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. All investing involves risk including possible loss of principal. Past performance is no guarantee of future results.
Steward Partners, its affiliates, and Steward Partners Wealth Managers do not provide tax or legal advice.