There is a common desire to secure and enhance the lives of our children and our grandchildren.
Unfortunately, most of the conversations about legacy conjure up difficult conversations about our wills and the assets we want to leave behind when we die.
There is so much more we can do to affect the next generation—and although a financial inheritance can be meaningful, the impact doesn’t always have to involve money.
Perpetuate Wealth While You’re Still Here
When we think about financial planning on a multigenerational basis, we often think about how assets are going to transfer from one generation to the next when there’s a death in the family. But there are ways to spread wealth to other generations while you’re still alive.
Contributing to a 529 College Savings Plan for grandchildren or using a whole life insurance policy for your children or grandchildren can amplify their tax-deferred wealth creation. A life insurance policy on your child or grandchild’s life may sound morbid, but structured properly, it can create resources that are available during their lifetime to pay for a home, to start a business or to create tax-favored retirement income.
Pass Down Financial Planning Resources
If you have a financial planner or advisor that you work with now, it is likely that he or she will agree to work with other family members for a reduced fee. This kind of legacy client program will allow your heirs, grown children or grandchildren to engage in full family planning so your family’s financial future is heading in the right direction. You also gain the peace of mind that when your heirs receive financial assets you leave behind, they are ready to handle them responsibly.
Immortalize Your Stories
There are things more important in this world than money—the stories, cherished memories, values and visions that we hold and wish to pass down to our children and their children. As time goes on, details of those stories start to fade from memory. How much do you really remember of the stories your grandfather told you when you were a child?
While you still have the time, capture the stories that mean the most to you: what life was like as a child, how you met your spouse, the lessons you learned from your own parents, all the stories that shaped your life and thereby shaped your family.
Record your stories—with video or audio—to pass on to future generations so that those stories can live on forever. There are resources available to help you do this (one of which is discussed in this podcast), or you can simply set up a camera on a tripod, sit on your couch and start talking.
What we leave behind can have a monumental impact on the people in our lives. As you plan to reach financial independence in preparation for your own retirement, start thinking about what you want to leave behind and how you can make your impact greater—financially and emotionally.
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