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Family Mission and Legacy Planning

Many individuals are aware of the importance of managing their finances with purpose but putting that knowledge into action can be challenging. Often, our desires for the present conflict with our desires for the future. For example, one might plan to wake up early to get that workout before the day gets away from them. We know that the workout is good for us in the long term. Longer life, happier life, healthier life. But the snooze button feels right now, today. Nine minutes of bliss is just one keystroke away. This struggle is referred to as "present bias" by behavioral scientists, where immediate temptations overpower future benefits.


Research shows that pre-committing to our goals can help us overcome this natural impulse to prioritize immediate gratification. We also know that sharing our goals with others results in more consistent outcomes. As such it is helpful to not only put a plan in place but also share that plan with others as a part of a broader legacy planning exercise.


Families often have priorities for their personal and lifestyle spending, but it is also important to consider priorities for the family. This is Family Mission and Legacy Planning. A family with a value of hard work might set aside resources for a child to go away for the summers to work on a farm or in the “trenches” of the family business. A family with a value of philanthropy might set aside resources to send a family member to a non-profit board leadership training program. However, these priorities are not only items that the family spends on during their life but these are also codified family values and deserve to be recognized in the family legacy plan.


This third bucket, the legacy bucket, presents a unique challenge. It holds money for our heirs and beneficiaries, which we hope they will receive well into the future. When planning for this bucket, none of our decisions have immediate consequences. Moreover, we know that we should plan for beyond our lifetime, but most of us would rather not contemplate a world without us.

So, how can we overcome this natural hesitancy and plan for the legacy we want to leave? This article provides a framework for thinking about these issues and a practical guide to achieving our desired outcomes.


When we pass away, we leave behind memories, businesses, personal stories, and love for friends, family, and the community. This is our legacy, which is often challenging to measure, shape, or control. However, a significant part of our legacy is indeed something tangible and controllable: a collection of assets that will go to specific individuals, organizations, or entities. If we do nothing, these assets will be transferred to others by default, often according to the laws of our jurisdiction. This might result in our assets being administered by unsuitable individuals or passed on to people we may not want to benefit. We can choose to be intentional, making deliberate choices based on our values and goals. We might divide our assets among beneficiaries who will receive our wealth upon our death. Alternatively, we could structure our wealth to be preserved and sustained across several generations beyond our lifetime.

 

It helps to think about the people who will receive the assets. Research shows that thinking about how our decisions affect others can motivate us to be more intentional. Identifying who we want to benefit from our assets can be a constructive starting point for taking action.

Once we have a clear idea of our desired outcomes, we can start fleshing out the details. Here are four critical questions to ask ourselves:


  1. Who is the money meant for? Is it for our spouse, partner, children, future generations, or other significant people in our lives?

  2. What, exactly, are we giving? Do we have a mix of belongings, investments, real estate, and businesses? What are they worth now, and what might they be worth in the future? What portion of our assets do we want to be divided among beneficiaries upon our death, and what portion (such as a property or business) might we want to preserve for multiple generations?

  3. When do we want to make our gift? Will it be during or after our lifetime?

  4. How do we want to make our gift? What is the best way to transfer our assets to our beneficiaries, such as setting up trusts or establishing a will?


By answering these questions, we can take control, shape the future, and create the legacy we want to leave.

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