What Does it Mean to Leave a Legacy?

 Written By: The American Academy of Estate Planning Attorneys

We all want to leave a lasting legacy for our children and grandchildren, but it can be easier said than done. In this article, find out how legacy wealth planning can go beyond basic estate planning to provide your loved ones with a true legacy, rather than a set of inheritances.

Leaving a legacy means more than providing an inheritance for your children. Too often, inheritances are squandered and forgotten. A legacy, on the other hand, means leaving behind not just financial security, but a sense of family history, belonging, and purpose, generation after generation.

You've spent years diligently saving and carefully planning to build a nest egg, but how do you transform what you've built into a legacy for your children, your grandchildren, and the generations to come? It's a job that goes beyond basic estate planning. One way to accomplish this job is through Legacy Wealth Planning.

A Legacy Wealth Plan is made up of the following components:

  • Family Wealth Trust: This Trust, tailored to your family's needs, is the foundation of your Legacy Wealth Plan. It holds the bulk of your assets in a flexible manner, leaving you in charge of your property during your lifetime. The Trust contains provisions that protect you and your family in case you become disabled. After you pass away, it lets you distribute your assets as you see fit without the need for probate. It also reaches into the future, allowing you to protect your loved ones inheritances from divorce, financial predators, and their own inexperience and poor judgment.
  • Pour-Over Will: A Pour-Over Will is necessary for two purposes. If you have minor children, it allows you to name a guardian in case you die before they reach adulthood. Whether or not you have younger children, you need a Pour-Over Will to "catch" any assets left out of your Trust and "pour" the assets into the Trust, ensuring all of your assets are distributed according to a single, uniform plan.
  • Financial Power of Attorney: With a Financial Power of Attorney, you can appoint someone you trust, called your agent, to take charge of assets not included in your Trust in case you become incapacitated. This way, your agent can pay your bills or file your tax return so that your financial affairs continue to run smoothly.
  • Health Care Power of Attorney: A Health Care Power of Attorney allows you to name an agent to make medical decisions on your behalf in the event you are incapacitated and cannot express your choices to your health care providers.
  • HIPAA Authorization: Under the Health Insurance Portability and Accountability Act (HIPAA), medical providers are required to keep your records private. With a HIPAA Authorization, you disclose to your doctors which family members or friends should have access to your protected medical information.
  • My Legacy Workbook: This workbook is a key part of your Legacy Wealth Plan. It helps you capture and pass down your non-financial legacy, including your family's history, values, beliefs, and ideals.

All of the elements of a Legacy Wealth Plan work together, allowing you to build upon the foundation you've worked hard to establish for your family. With this plan, you can do more than leave your loved ones a financial inheritance; you can leave a legacy rich in your family's history, values, and ideals.