Creating a Legacy with Your Money: Planning for Generational Wealth
By: Amy Getz, CPA, CDFA®
When most people think about financial planning, they often focus on short-term goals like budgeting, saving for a vacation, or building an emergency fund. While these are essential steps in achieving financial stability, there's another crucial aspect that often gets overlooked: legacy planning. Creating a legacy with your money is not just about accumulating wealth for the here and now but building something that can benefit future generations, support causes you care about, and leave a lasting impact.
A well-thought-out financial legacy isn't reserved for the ultra-wealthy. No matter your financial standing, you can start taking steps today to create a legacy reflecting your values, dreams, and ambitions for the people and organizations you care about.
Why Legacy Matters
At its core, legacy planning is about more than just money. It’s about passing down values, knowledge, and opportunities. Creating a financial plan that considers your family’s future gives them a strong foundation to build on, whether through education funds, investments, or charitable giving. The peace of mind from knowing your financial impact will extend beyond your lifetime can be deeply fulfilling.
Key Steps to Building a Financial Legacy
1. Define Your Legacy Goals The first step in legacy planning is clarifying what legacy you want to leave. Do you want to support your children’s or grandchildren’s education? Are you passionate about supporting a charity or cause? Or perhaps you want to ensure your family has the financial means to continue pursuing their dreams. Understanding your priorities will guide the decisions you make along the way.
2. Estate Planning and Trusts An estate plan is essential in ensuring that your assets are distributed according to your wishes. It can also reduce the tax burden on your heirs, helping to preserve the wealth you've built. Trusts are another valuable tool that allows you to control how and when your money is used, protecting your financial legacy from potential mismanagement. Working with an estate planning attorney can help you navigate the complexities and ensure your plan is legally sound.
3. Invest in Education and Financial Literacy One of the most potent ways to create a lasting legacy is through education. This doesn’t just mean setting up a college fund (although that’s important). It also means educating your loved ones about financial responsibility. By teaching your children or beneficiaries the principles of saving, investing, and managing money, you equip them with the tools to maintain and grow the wealth you pass on to them.
4. Charitable Giving If philanthropy is important to you, there are several ways to incorporate charitable giving into your financial legacy. Donor-advised funds, charitable trusts, and planned giving programs can allow you to support the causes you’re passionate about even after you’re gone. Not only does this create a lasting impact, it can also offer tax benefits during your lifetime.
5. Start Early, Review Regularly Building a legacy doesn’t happen overnight. It requires ongoing attention and adjustments as your financial situation and goals evolve. Starting early and regularly reviewing your financial plan ensures it aligns with your long-term vision.
Your Legacy, Your Values
Ultimately, creating a financial legacy is a personal and meaningful process. It reflects the values and principles that have shaped your life and offers a way for you to continue making a positive impact for years to come. Whether your focus is on supporting your family, giving back to your community, or building generational wealth, your legacy plan is a testament to the life you've built.
As your financial planner, I'm here to help you navigate this journey, making sure that your financial decisions today align with the lasting legacy you wish to leave behind. Let’s start the conversation and ensure your money is working not just for you but for future generations as well.