Let’s look at the difference between estate planning and legacy planning, so that you, your loved ones, and your legal advisors can decide together which may better fit your situation.
Estate Planning Is…
Estate planning relates to arranging for the distribution of your assets after you’ve passed on. It involves writing a will and potentially setting up trust funds for children or grandchildren.
Estate planning may also include legal medical documents such as a living will and a durable power of attorney.
Legacy Planning Is…
Legacy planning takes into account a number of other factors. These may include:
- Determining future charitable contributions and setting up foundations
- Preserving family history
- Establishing a business succession plan
Legacy Planning Represents Who You Are, Not Just What You Own
While estate planning ensures your assets will be divided the way you want, legacy planning looks not just at your assets, but at how future generations may conduct business and how they will be perceived. In short, it’s setting up your legacy for future generations.
A key part of legacy planning involves determining what legacy you want to leave. Meet with your legal and business advisors, as well as close family members and even business colleagues, to determine your personal mission and values.
What important aspects of your values do you want to preserve after you’re gone? How can you best convey these values to future generations?
Here’s what you should know:
- Charitable Contributions: Establishing charitable contributions or setting up a foundation for a favorite cause in your name can ensure you’re remembered favorably for generations. It can also ensure your wealth goes toward causes you support.
There are a number of ways to ensure continuing charitable contributions after you’re gone. Legacy planning helps determine the best ways while limiting tax liabilities so more of your money goes toward the causes you believe in.
- Family History: Preserving your family history, through written documents or spoken word, is another important part of legacy planning.
You don’t want all your family stories to die with you. Make sure you’ve recorded significant moments, values, belief, and knowledge. And store them in places where your loved ones can access them.
- Material Goods
Your material goods also represent a part of your family history. This may include first edition books, arts and other collectibles, antique furniture, and real estate. Ensure property and collections will remain in the family through legacy planning.
- Business Succession
Finally, legacy planning often involves a succession plan for the business. Another family member may not always be the best person to take over your business when you can’t continue it.
Your successor could be a key employee or someone else who’s been involved in the organization and understands how to keep the business running successfully.
Establishing a succession plan in advance, as part of legacy planning, can help prevent conflict when the business owner passes on.
How Are Estate Planning and Legacy Planning Different?
Estate planning represents the most basic preparations for someone’s death. Legacy planning is a more in-depth process that covers distribution of wealth, charitable contributions, family history, and a business continuity plan.
Expert advisors can help you determine which level of planning you need, and help you put together a plan that will ensure your wishes are carried out after your death.
Find Peace-of-Mind at Five Star Senior Living
Once you know your legacy will live on, it’s time to find peace-of-mind in the here-and-now. Five Star Senior Living ensures the quality of life you deserve and have worked so hard for.