To ensure a lasting legacy, you need to ensure your financial affairs are in order and have a clear plan for how your wealth will eventually transfer. Legacy planning adds an emotional aspect to the wealth preservation process.
It sets out your personal expression of values, beliefs, family history, and so on, and includes ways of ensuring your legacy reflects these values over and above simple material wealth distribution. It also ensures you are leaving things in order so that there is no confusion and family members do not fall out over what should happen to your assets and money.
Describe how your wealth is to be managed
Legacy planning is a term used to describe how your wealth is to be managed, ensuring that when you pass away your money and belongings go where you want them to. A well-structured legacy plan can include leaving a gift in your Will, making a charitable donation in secret, or helping a relative buy their first home.
If you have family and friends who depend on you financially it is especially important to have a good understanding of what happens to your money when you die. Without this information they could be at risk from unscrupulous people who might take advantage.
There are many reasons why creating a legacy plan can be beneficial, for example, you could reduce a potential Inheritance Tax bill, make a gift from the value of your estate, and support those who need it most.
How you would like people to remember you
It can also provide an opportunity to reflect on how you would like people to remember you when you are gone. It is a chance to celebrate the good things about life as well as dealing with difficult situations that might be causing stress or anxiety, such as leaving debts or unresolved arguments in your Will.
Doing nothing is one option but this could be very risky. Your family may not receive any money if your executors don’t know what kind of legacy plan you had in mind – so it’s vital they are kept informed of your wishes after death.
Sharing memories through words and pictures
If you have made provision for your family in your Will they need to know the contents of this, as well as what to do if there are no stated provisions. If you do not think anyone will be able to sort out your affairs when you die, then now is the time to put a plan together.
The first step is to decide what kind of legacy gift – whether it is large or small, giving something concrete like money or sharing memories through words and pictures. It is all about thinking ahead and doing something that works for everyone involved while benefiting others too.
Legacy planning does not have to be complicated
Once you’ve decided on a legacy plan the next step is making sure everyone who needs to know about it is aware. The last thing you want is for your family and friends to be at a loss when you pass away without having any idea what you wanted.
Start talking about your wishes early so they know exactly what to do and who needs to be involved in making the plan happen. Legacy planning does not have to be complicated, but it is worth taking the time to get it right.
Growing your wealth
Goals based investing
- Cash flow modelling
- Creating a financial roadmap
- Investment objectives
- Timescales and market activity and the impact of losses
- ‘What if’ scenarios
- Discussing legacy planning with your loved ones
- Inheritance Tax (IHT)
- Inheritance Tax Residence Nil Rate Band (RNRB)
- Lasting power of attorney
- Lifetime transfers
- Making a Will
- Preserving wealth for future generations
- Protecting your assets for the next generation
- Slicing up your wealth pie
- Children’s pensions
- Defined benefit (or final salary) pensions
- Defined contribution pensions
- Personal pensions
- Self-Invested Personal Pensions (SIPPs)
- The state pension
- Annual allowance and lifetime allowance limits
- Busting myths about pensions
- Increases to pension age and new normal minimum pension age
- Pension freedoms
- Pension withdrawal methods
- The lifetime allowance
- Delaying retirement
- Generating income from investments throughout your retirement years
- Importance of a retirement wealth check
- Retirement goal setting
- Retirement planning
- Reviewing your retirement plan
- Staggered retirement
- Taking control of your retirement plans
- What can I do with my pension?
- What happens to my pension on death?
- Discretionary Fund Managers
- Market timing
- Minimising risk
- Multiple asset classes
- Portfolio insulation
- Pound cost averaging
- Principles of investing