Western Fraternal Life :: Legacy Planning - It's More Than Just Making a Will

Legacy Planning - It's More Than Just Making a Will

Jul 01, 2016

According to the Federal Reserve (FederalReserve.gov) 71% of Americans over the age of 65, with adult children, keep their personal finances to themselves. A 2012 survey by the U.S. Trust found that the majority of retirees with assets over $1 million feel they have a responsibility to philanthropic giving to create a positive change, but have done nothing to facilitate their wishes. You may believe that your personal business and incorporating charitable giving in your estate plan is not your kids’ business, but it may make sense to break through the financial communications barrier and make your family aware of your plans.

Legacy planning generally brings a family closer together. It can convey your values and sense of family while accomplishing your financial, estate planning, and charitable giving goals. Engaging your adult children (the next generation) in your planning can decrease taxes and pass additional wealth to charities and your family.

One key reason to share information with family members is to facilitate the continuation of your finances, based on your wishes, if you are unable to take care of them yourself. Recently, a family friend who is single with no children, suffered an incapacitating viral infection that put her in the hospital for over a month and in rehabilitation for two more months. She had been the picture of health with a regular exercise program and healthy lifestyle prior to her illness. Even though she is an attorney, she never felt the need to create a medical or financial power of attorney document. Yet, during the crisis, decisions needed to be made regarding her health and finances. Her closest relative, a brother living out of state, and some cousins made some decisions that turned out to be against her wishes. Since she had never anticipated the need for someone else to make decisions for her, mistakes were made and angry words were spoken. Sharing information about your wishes and creating documents to legally carry out those wishes are prudent and responsible.

My family recently completed some legacy planning. Our attorney updated our medical and financial powers of attorney documents and our wills. Our children are in their late 20’s and early 30’s, so we felt it was time to start planning with them. They were involved in the meetings with the attorney and are aware of all of our assets and the trusts created in our wills. We discussed charitable giving and the values and passions that we want our children to align with their goals and expectations.

One important change that we made was to take charitable giving out of our wills and changed our beneficiaries in our retirement plans to include our charitable giving wishes. Our IRAs are taxable while most of our non-retirement plan assets would pass to our children free of income or estate taxes. So, it made sense to designate a percentage of our retirement plans to our favorite charities. The charities will receive these taxable assets without paying any taxes. Our life insurance contracts will pass to our children tax free, too. So, bottom line, if you have charitable intentions and want to transfer assets with the least amount of taxes, designate a certain percentage of your IRA assets to charity and leave your life insurance and other assets to your family.

Legacy planning might just be the peace of mind you need. Legacy planning is just one of the services Western Fraternal Life Wealth Management Inc. provides. Give me a call at 877-935-2467 and ask for Julie.

Category: Estate Planning

Julie Cole


CFP®, FLMI, Annuity Product Manager

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Call 877-935-2467 to speak with a Western Fraternal Life Representative.