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“I have this dream my daughter in-law kills me for the money

She thinks I left them in the will

The family gathers ’round and reads it and then someone screams out

“She’s laughing up at us from hell”

-Lyrics from the song ‘Anti-Hero’ by Taylor Swift.

While I find the above line hilarious, and Taylor Swift is an exceptional songwriter for her ability to say uncomfortable things in a candid manner, it is the truth of life. Though her choice of a particular family member here is surely questionable.

Legacy planning or Estate Planning is an often overlooked aspect of a financial plan. We are all focused on making money, investing it and growing it.

But, what happens to all that wealth when you are not around?

How do you ensure your money is distributed as per your wishes and in a tax efficient manner without being held up in disputes or litigation? 

What can you do today so that your spouse maintains their financial independence in your absence?

These are important conversations that need to be had sooner rather than later.

If you have a wish to do something particular with your hard earned wealth, distribute it in a certain manner, then you need to plan for it today. Hoping and wishing for the best is a fool’s errand.

I have personally observed how relationships can be strained when you leave it to the next generation to figure out for themselves.

On the other hand we have all seen these play out in family businesses in India in the not so distant past. “Reliance” on your kids to divide your wealth can be extremely detrimental to the family dynamics.

What is Legacy Planning?

Your legacy is how you are remembered once the inevitable happens. While the end of life is inevitable, how you are remembered is completely in your control. Your legacy is much more than the wealth or assets you leave behind, but this part of it can leave a bitter taste for your families if you do not take care of it while you are around.

Legacy planning is a financial strategy that helps people be ready to leave their assets and wealth to their loved ones or closest relatives after passing away. Yourfinancial advisor should plan, educate you and put a plan in place for this. Investing to generate returns is not the only thing he should be focusing on. If you are starting the legacy and estate planning process, your main worry may be giving as much as possible to your loved ones and preferred organizations while paying as little in taxes as possible. But, your legacy goes beyond simply leaving behind more money for future generations to enjoy. While this goal can typically be achieved via thoughtful and cooperative preparation, preparing your family for the money they will get is frequently the trickier aspect of the process.

How Legacy Planning Works?

The end of life is inevitable, but how you are remembered is most important. Before life has its own plans, it’s necessary to think about your own legacy.

Wealth and property of the deceased are distributed to their next of kin or individuals or organisation’s named in their will after they pass away.

High Value Life Insurance plan, or Jumbo life  is a Universal Life Insurance plan which acts as an excellent tool to plan for this. It can act as a mode of estate equalisation, business continuity planning or creating a separate asset class uncorrelated to stock markets, your business etc. These offshore insurance plans also are extremely tax efficient in how they are structured.

With a plan, your estate may be managed according to your preferences after your passing. Estate planning is crucial for people who own small enterprises or other assets requiring care.

Tips for Legacy Planning

Years of dealing with high-net-worth families have taught me that an optimal strategy requires a cross-generational knowledge of what wealth means to each family member and the family as a whole, in addition to providing financial education for the next generation. It might be beneficial to ask and provide answers to three key questions to fully comprehend the values associated with the money you have generated.

Gather All the Information

Please make a list of all your assets and the locations where they are held. These range from real estate, insurance coverage to investment accounts.

There are additional elements that must be taken into account, such as:

  • Who should receive your property and other assets, according to you?
  • Do you make any charitable contributions?
  • Do you need an advance directive to reflect any unique preferences you may have for your medical care?
  • Will all your heirs want to be involved in your business or would one of them want to forge his own path?
  • How much of your current wealth is at risk? For example businesses go through cycles, real estate can be illiquid and have major fluctuations just like  your stock market investments. How do you protect this risk?

It will be easier and more effective to simplify the procedure if you have all the answers from the outset.

Have an Open Discussion with Your Family

Finding your goals is the first stage in building a legacy strategy, regardless of whether you have short-term cash flow demands, long-term asset transfer plans, or charitable ambitions that will last for generations. The greatest approach to do this frequently is having frank conversations with loved ones and reliable experts. To maintain a happy family and financial security, good communication is essential. Families who succeed in passing on their history through successive generations have typically formed true trust, which is fostered through kind and open communication.

Think of the Rockefeller foundation, Bill & Melinda Gates Foundation or even the Rothschilds. All created trusts, foundations and other structures to ensure the wealth survives for generations and is handled as per their explicit wishes.

The reason I mention these billionaires here is because a lot of wealthy people I meet think that if you have enough wealth, why do you need to plan anything. But if Bill Gates or The Rockefellers feels the need, it should make you wonder, why you’re not doing it.

Seek Out Expert Guidance

Always seek the counsel of experts who are aware of the rules and regulations while making any kind of planning. That entails asking a family office for assistance. Every family member has distinct requirements and expectations and various things they want out of life and from their legacy. Thus, the legacy plan needs to be tailored because they all have different financial circumstances.

Different laws and tax regulations based on your nation of residency, marital status, whether you have children, and how much wealth you own will all affect the preparation. Make sure you know all local, state, and international laws that apply to taxation, probate, and other matters.

Make a Legacy Plan

Because you have worked hard to accumulate your riches, you would want to create and nurture a legacy that would go on long after you are gone. The fundamentals of legacy preparation must be completed, such as writing a final will and an advance directive.

It is also advantageous to approach the process holistically by developing a legacy plan, which will aid you in preserving your legacy for years to come, whether it entails establishing a foundation, setting a trust, drafting your final will, etc. Establish a legacy plan to ensure that your heirs will be cared for when you die.

Wrapping Up

Nobody sets out to fail, but many people do, especially in preserving their wealth for generations. To ensure that the transfer of money, values, and philosophies is seamless in the case of unforeseen events and that your successors can maintain a comfortable standard of life, it is always preferable to begin legacy planning as early as possible. To know more about legacy planning and how some of the Offshore High Value Insurance solutions can help with it, you can always connect with me.