Legacy planning is a process that is similar to estate planning but involves some different steps as it is more geared for those on “main street” than the top 1%. The account/asset owner determines how to distribute assets to their heirs upon their death. The process offers the deceased an opportunity to influence how their legacy is applied, even if they are not there to influence it in person.  Legacy Planning could address the causes that the estate owner wants to contribute to such as charities that they are passionate about or an alma mater. Proper planning allows the owner to decide what they want to do with their hard earned wealth and assets should those assets not be required in supporting the retirement lifestyle.

A legacy plan defines the value systems of the retiree and offers the opportunity to expand on the reasoning behind each assignment to their heirs. When creating these plans, one must consider what is most important to them individually and not just distribute their wealth or assets to their loved ones just because the heirs feel entitled to those assets. 

Setting Up an Insurance Plan 

Insurance planning involves an assessment of all financial risks linked to protecting your family both during and after your lifetime. Earlier in one’s career, there is more emphasis on a larger Death Benefit so as to cover large liabilities (such as a mortgage) and income replacement.  As you progress through your career, the liabilities generally shrink, the kids grow and stop being dependent, and the needs change.  This is where recent policy innovations, referred to as Living Benefits, that allow you to accelerate the Death Benefit during the insured’s lifetime have become such a valuable rider.  This is because these riders add flexibility that empowers your Death Benefit to protect much more than just your family after you are gone.  These riders can be used to address medical concerns such as cancer, heart attack, and stroke or they can be designed to address more of the Chronic Illnesses that lead to a LTC episode.  Permanent policies also can have Cash Value appreciation over time and that Cash Value can be accessed tax-efficiently by the policy owner.

As your family grows and evolves your need for a traditional Death Benefit diminishes, but our need for Living Benefits and Tax-Efficient Income increases.  Thus, policies that offer robust living benefits or cash value growth, allow your premium dollars to simultaneously address numerous what-if scenarios, such as:  

What if I were to pass too early?  

What if I were to become seriously ill or have diminished independence (LTC need)?

What if taxes became the biggest threat to my retirement lifestyle’s sustainability?

What if I have a goal of replacing the legacy my assets would leave with a more tax-efficient, highly-leveraged Death Benefit?

Decide Where to Distribute Assets

With legacy planning, the client starts thinking about who should receive any remaining assets and wealth. Many families set up plans for their wealth to go to certain charities and organizations in addition to distribution amongst loved ones. Some of their money or assets could go into a trust for the family members which allows the original owner to have more control of those assets (even after they have passed) & commonly passes those assets to your beneficiaries more cost-effectively than the probate process.

When creating a legacy plan, consider what you want people to remember about you. If you contributed to charities or set up organizations to help others, you may want to be remembered for your part in these organizations and philanthropy. When creating these plans, you must create a full list of all assets and wealth, including the location of certain bank accounts, savings, and their current investments. 

Getting Ready for Retirement

With a retirement plan, individuals need to consider how much to save to accommodate their preferred lifestyle. A Retirement Strategist can help those preparing for retirement to calculate their expenses according to the cost of living where they plan to reside and their current lifestyle budget. Inflation is considered when calculating these costs, and living expenses are expected to continue to increase over the course of your golden years. A comprehensive plan addresses these increases in living expenses and other expenditures during retirement. 

When a person retires, they may choose to downsize and sell their family home. If they sell the property, a retirement planner can help guide the owner through the processes for using those proceeds to better their retirement. The owner could review different housing options that allow them to save more money and live on a more modest budget. 

The team at Walker Capital can help calculate living expenses for different senior communities where the retiree may want to live. They can also help the families create plans for traveling and taking vacations (and compare the impact of different budgets on their legacy). These plans give them the confidence to enjoy their hard earned money at a pace that is sustainable.

By planning ahead, the estate owner can avoid overspending and stay within their projected budget. If not, they may need to increase their contributions to a retirement plan to generate more funds for retirement. Tax implications for withdrawing money from the plans must be managed, too. 

Where to Get Started 

Walker Capital has an exceptional reputation for helping its clients create comprehensive legacy and retirement plans. We have a long history of excellence in the Charlotte area and offer services from a highly skilled team who understand how to guide families through these complex processes. You can learn more about the steps in this planning process by contacting us today. 

Legacy and retirement plans are a must for anyone who has accumulated wealth through a large collection of assets. These plans help them consider what the future will be like and what lifestyle they want to follow. The Retirement Strategists at Walker Capital can assist families who don’t know where to start with these plans and help provide initial guidance en route to establishing a more tax-efficient, robust retirement income and legacy.