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Building wealth is only half the job. Protecting wealth for your loved ones and yourself is equally important. Through estate planning, business planning, and asset protection, our firm will help you protect everything you love — family, friends, and favorite charities. For more information, be sure to visit our website, where you will have access to our blog, events schedule, and a complimentary newsletter subscription!
Cyberwarfare is Hitting Close to Home
Last month I wrote about the growing threats to each of us from computer hackers and criminals.
Now the East Coast Gas Pipeline was compromised. Apple is being blackmailed, May Universities, government agencies, and now even smaller businesses are under attack. I just wanted to ring the bell again to warn you that this will be costly to us if we can’t figure want to real security online.
Sometimes problems as so large or confusing that they seem beyond us. I find that taking one small set can help: Back up your data consistently. We are now doing so with renewed vigilance. This a step that you can do to exert some control over this threat.
On a brighter note, there is another area in life where you can be a direct positive agent of change:
Planning Your Legacy
“Estate planning” traditionally means making legal arrangements for how you want to transfer your assets to your loved ones, charities, and others after you die. “Legacy planning,” on the other hand, can involve the same steps as estate planning, as well as others. Over the last few years, legacy planning has grown in popularity and frequency of use. This is a brief overview of some key legacy planning considerations.
How to Create a Legacy
The key to the process is carefully considering what you want. Topics to address include:
- What kind of legacy do you want to leave?
- Do you want your assets to go entirely to loved ones and friends?
- Do you want to make substantial charitable gifts?
- If you made charitable gifts, would you want your loved ones to be involved in administering your generosity through a donor-advised fund, rather than leaving lump-sum charitable gifts?
- Are you interested in creating your own family foundation?
- How might you want to transfer your most important values to your loved ones?
Incentivizing a Legacy
You can impart values to your loved ones through various means. A popular option is to connect incentives to the receipt of an inheritance. You may choose to have your loved ones accomplish one or more life goals to receive their inheritance. For example, you may encourage them to:
- Graduate from college
- Maintain gainful employment or contribute to society through service, even if they were to inherit enough assets to meet their financial needs without working for a paycheck
- Be involved in your family foundation.
- Complete drug or alcohol addiction treatment, if applicable; or
- Pass ongoing drug tests to continue receiving installments from a trust fund, if relevant.
Although these options are not comprehensive, they provide a basic example of incentives you might choose to include in your legacy plan.
Choosing a Trustee
If your estate and legacy planning involve ongoing distributions to loved ones, then your plan will likely require someone to administer those distributions in keeping with any attending incentives. In short, with legacy planning, you will need the right person or institution to serve as trustee. Although you can carefully create a plan to achieve your goals and yet be sensitive to the individual skill sets and challenges, a trustee who does not follow through on the terms and conditions will cause your plan to fail.
Selecting a trustee can be a delicate balance between authority and compassion. Your loved ones could resent the power they find to be unreasonable. The trustee should be someone with integrity, competence, and common sense.
You should appoint several successor trustees to take over if the first persons you are relying on become unwilling or unable to perform the duties. Having a chain of command here is also critical because the most responsible person can have circumstances arise where their service becomes impractical. Even so, many people have difficulty designating one person in whom they would have sufficient confidence. Accordingly, the best option may be to select a professional or corporate trustee from the start. Having an unbiased third party making tough calls can prevent damaged relationships within the family.
Alternatively, there is yet another option to consider. Depending on your unique circumstances, you may want to appoint a trusted family member or friend, along with a professional or corporate trustee. That way, you may have the best of both worlds covered to carry out your legacy planning.
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