WHAT WILL YOUR LEGACY BE? How to Leave a Lasting Impact
O ne of the most amazing things about the story of Saint Nicholas I shared in the cover article is how long we’ve been telling it. Nicholas was only one man, but his many acts of kindness and charity left a big mark on the world. It’s inspiring! We can’t all be Santa Claus, but I believe that we can all follow in Saint Nicholas’ footsteps and leave a positive legacy behind. Christmas is a great time to consider this idea because the spirit of giving is already in the air. Creating a legacy plan can be one way to regain some control at a time when things might feel out of your hands. You can firmly establish a foundation for your legacy and maintain some control after you are gone. But how do you start? The first step is deciding what legacy you want to live and what legacy you want to leave when you are gone. “Begin with the end in mind,” as Stephen Covey would say. Consider this question: How do you want to be remembered? Write that down in as much detail as you can. Once you have determined what your legacy should look like, it is time to design your desired legacy. Create two lists. One list should identify your “talent gifts,” who can benefit from them, and who you want to share them with (these two things may not be the same). Then rank your “possessions” by value and who will receive each item. If you are a small-business owner, this can be a challenge if your largest asset is the family business and your heirs do not equally participate in its operations. There are ways to work around this to be fair and equitable to all your loved ones, and that is where the expertise and objectivity of a financial advisor can really be of value. Your legacy will be different from any other person, and that’s perfect because you are unique! Your legacy has been emerging as you live life on your terms. It is shaped by how you interact with people each day. This includes your family, coworkers, professional peers, friends, and charities you support with your time and/or money. When you share your unique set of “gifts”
with others, you are expanding your living legacy, probably with very little thought. But now is the time to be more intentional. Your living legacy can be powerful and have a significant impact on many lives for years after you are gone. Is your current living legacy aligned with the envisioned legacy you defined above? If not, make the necessary adjustments. Now consider your financial legacy. It has two parts: a “living” part and an “after you are gone” part. The living part is your annual or periodic gifts to family, friends, or charity. Are these financial gifts aligned with your overall legacy? If not, what adjustments do you need to make? Then make them. Many are inspired to give to charity partially due to tax reasons. For example, if you are over 70 ½ years old, you may contribute up to $100,000 from your IRA directly to an eligible charity and not pay income taxes on the gift. Anyone who itemizes can also deduct their contributions; however, there are some income limitations. Everyone else should be aware that they can take a $300 deduction for charitable donations in 2020 as an above-the-line deduction. Lastly, let’s go over some of the other legacy planning tools you can use to implement your legacy strategy after you are gone. The most common tools are to draw up a will or set up a Transfer on Death (TOD) account. Trusts are another mechanism many use to transfer ownership of property to their heirs or charity. There are several types of trusts, so you may want to check with your financial professional to see which is best for your situation and objectives. The path you choose will depend on your desired legacy wishes and factors like tax minimization or avoiding probate. If you’re not sure which option is right for you, give me a call. I’ll work with you to make sure you create a plan that algins with what is important to you and that every dollar you give goes as far as possible!
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