March 30, 2020
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Although there is a significant financial component to leaving a lasting legacy, it encompasses so much more than just money. It’s easy to get stuck in a pattern of living life day by day, but your legacy isn’t something you make time for; your legacy consists of the choices you make every single day. It’s about how people will remember you and the impact, both financial and personal, that you have on your family, friends, community, and the world. No matter how old you are, it’s worth taking the time to consider the legacy you’d like to leave in each of the following areas.
Financial Impact on Your Loved Ones
Your financial legacy to your loved ones isn’t only about how much you leave, but how you leave it. Getting your estate in order now can save your loved ones a significant amount of time and money later. Basic estate planning documents consist of a will, health care directive, and durable power of attorney. You may also want to work with a financial advisor who can help ensure that the process is as streamlined as possible for your loved ones after you’re gone. This includes matters you may not automatically associate with estate planning, such as making sure you have up-to-date beneficiaries listed on all necessary accounts or securing all login information for accounts in one central location.
For some people, there’s value in passing down wealth while they’re still alive. You may prefer to help your children or other loved ones at a time in their life when they need it most. Though there are tax implications when gifting large sums of money, there are other ways you can help ease the financial burden of loved ones, such as helping to cover the costs of a grandchild’s higher education. This can be an incredibly complex endeavor with implications you may not be aware of. Therefore, if you’re considering passing down wealth while you’re still alive, you should work with a knowledgeable financial professional.
Personal Impact on Your Loved Ones
Just as important as the financial impact you have on loved ones is the personal impact you have. You should ask yourself if there’s anything you want to sort out prior to passing on. Are there broken relationships in need of repair? Feelings you always meant to share? We often go through life assuming there’s time to handle these things later. While there probably is, part of leaving a positive legacy for your loved ones is showing them that they’re your top priority and worth taking time for.
There also may be information you want to pass on. In addition to the logistical details you should share, such as your desires for your funeral, you may also have more personal information to share. Maybe you’re the collector of generations of family stories and history. Younger generations would probably love to have this cherished and irreplaceable knowledge.
Financial Impact on Community
You may choose to leave all of your money to your family, but you may also opt to leave some (or even all) of it to a cause you care about. This could be anything from your alma mater to a local food kitchen. Because all organizations may not use your money the same way, it’s worth taking the time to make sure your money is being used in a way that you feel good about.
As with leaving money to your loved ones, you don’t have to wait to give money to an organization after you’re gone. In fact, charitable giving is a common aspect of many financial plans. Besides the goodwill it can bring, charitable gifting also comes with potential financial opportunities, such as tax advantages. If you’re looking to make a financial contribution to an organization or cause, speak with your financial advisor to make sure you’re doing so in a way that allows you to capitalize on any financial benefits.
Personal Impact on Community
The impact you have on your community extends far beyond how much money you do or do not donate. Leaving a lasting legacy requires connecting with your community. Volunteering is one of the best ways to do this, but it is far from the only way. Think about the people in your community you admire. Consider what you admire about them and find ways to not only incorporate these qualities into your own life but to also provide a similar impact on those around you and in your community.
Financial Impact on the World
You may mistakenly believe that unless you have billions laying around to donate, you can’t have a financial impact on the world. The reality is that how you spend your money is what truly makes a difference. What you choose to spend your money on is what you support. Think about the causes you care about. Are you spending your money in a way that supports these causes? This doesn’t have to be overly complicated. If you love your city and want to support the growth of local restaurants that are bringing more people to the city, for example, consider dining at these restaurants more in lieu of patronizing national chains.
Personal Impact on the World
Leaving your impact on the world doesn’t require starting a worldwide movement or making substantial financial contributions. Instead, take time to think about the causes you care about deeply and live your life in a way that supports these causes. If you feel strongly about access to quality education, you could write a letter to your elected representative about important upcoming legislation. If environmental issues are your top priority, you could make a more concerted effort to utilize reusable products and promote recycling.
What Will Your Legacy Be?
Many of us spend much of our lives preparing for future goals, such as retirement. Though this should be a priority, you should also consider the legacy you’ll leave behind, financial and otherwise. Arguably the only thing more rewarding than working hard so you can enjoy your life in retirement is working hard so you can enjoy your life in retirement and leave behind a legacy that will have an impact for generations to come.
