It’s easy to get caught up in the day-to-day; thinking about what we’ll leave behind when we’re gone isn’t typically top of mind. And when we do make time to plan for a “legacy,” it’s generally limited to writing a will and divvying up assets. But leaving a true legacy is about more than just money. Will your gift ensure your child’s security for years to come, or will it be a mess of assets, liabilities, and confusing records that takes years to sort out?
If you plan to pass your wealth to your children, it’s important to make the transition as smooth as possible. While your children walk through grief and heavy decisions, they shouldn’t have the added stress of dealing with a chaotic inheritance process. Incorporating comprehensive legacy and estate planning can make this process much smoother.
The Importance Of Estate Planning
Estate planning should be an integral part of your financial and retirement planning. Failing to have an estate plan may not have a significant impact on your own life, but it will undoubtedly affect the lives of your loved ones after you’re gone.
In the absence of an estate plan, your death will be considered intestate, which means there was no valid will in place at the time of your death. The state in which you lived will determine who inherits your property through a process called probate, which can take anywhere from 6-9 months or even several years without proper planning.
In addition to this process lasting a long time, your inheritors may face expensive fees, predatory claimants, and loss of control over what happens to your estate. Probate can cost up to 3-7% of your total estate value. (1) And because this process becomes public information, this means that greedy creditors or estranged relatives may attempt to claim portions of your wealth.
Good estate planning mitigates these risks and provides your family with a secure plan for how your wealth will be transferred. The professionals in your life, such as your estate planning attorney and financial advisor, can become trusted resources for your family to lean on during this difficult transition.
Create A Lasting Legacy
Additionally, good estate planning incorporates legacy planning, which can be even more beneficial to your inheritors. Legacy planning allows you to incorporate family or financial values into your wealth transfer. If your children aren’t as adept at money management or have made financial mistakes in the past, your legacy planning can help guide them through what to do with their new wealth.
Your legacy planning can also ensure your children use the inherited wealth to continue providing security for all members of the family, and not to pay for unnecessary luxuries. Legacy planning may help to protect your grandchildren and encourage generational wealth-building for decades to come.
Leave An Inheritance You’re Proud Of
If you haven’t taken the time to think about the type of inheritance you’re leaving behind, we get it. But now is the time to prioritize this critical task. After all, if the last year has taught us anything, it’s that we never know what’s around the corner. As much as we dislike thinking about our mortality, the truth is that we can’t predict the future, and having a plan in place will provide some peace and comfort to our loved ones.
Instead of leaving your family with a mess, give them a lasting legacy that will enrich their lives as well as future generations. Our team at Nichols Financial Strategies is dedicated to supporting, educating, and providing informed direction to every client. If you partner with us, we will use our knowledge and experience to help ensure your family is well taken care of so you can feel confidence and enjoy knowing someone is not only watching out for you but your family as well. Schedule a complimentary appointment by reaching out to us at 559-440-6999 or by email at email@example.com.
Matthew Nichols is founder, CEO, and wealth advisor at Nichols Financial Strategies with more than 20 years of experience in the financial industry. He spends his days serving business owners and families, specializing in helping those in the agriculture industry proactively prepare for the unique challenges they face in a rapidly changing economy. Matt is an Accredited Investment Fiduciary® (AIF®) and holds his FINRA Series 7 and 63 securities registrations with LPL Financial and his California State Life & Health Insurance license. He’s also pursuing his ChFC designation and is dedicated to continuing his education and staying abreast of the latest financial trends and strategies. Matt’s mission is to help his clients transfer wealth from one generation to the next and work toward achieving their goals so they can spend more time on what they love most. Matt was born and raised in the California Central Valley and resides in Fresno with his wife, Christy, and their two daughters, Holly and Jillian. He enjoys golf, traveling, skiing, and spending quality time with his family. To learn more about Matt, connect with him on LinkedIn.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.