Trusts, assets, savings. It’s all very well building a formidable financial portfolio but to make it count, we need to determine how our wealth will impact our loved ones when we’re gone.
Planning for one’s demise is never a thrilling prospect. That’s probably why estate planning is something we often but on the backburner until an undefined date in the VERY distant future. While we’re all about living our best lives, to actually do that, we need the peace of mind of knowing that our families and future generations will be taken care of when we’re gone. That’s why it’s never too early to decide how to pass on your wealth and wisdom.
The ins and outs of estate planning
Estate planning involves drafting the documents and plans to be followed when you’re done to ensure that those you leave behind are taken care of – and that they’re not left with an administrative nightmare. Many also consider philanthropic causes when it comes to leaving a legacy.
It all starts with having a will in place and ensuring that your loved ones know where to find it. But estate planning goes far beyond one’s will. It means looking at the full picture. An effective estate plan needs to accommodate your onshore and offshore assets and investments, retirement plan, income tax and business interests, while also considering your family’s makeup and needs. It also works to put a plan in place to settle any debts upon your death and to manage any estate duty for which your beneficiaries may be liable before receiving their inheritance.
Regardless of what the movies would have you believe, the reading of a will and the division of assets it lays out is seldom a shock to those left behind – insert dramatic revenge plot here. Efficient estate planning in fact involves ongoing communication with all those involved to ensure the end product is in line with your wishes and is in the best interests of those you love. It’s also the best way of ensuring your plans will materialise in the way you want them to.
Transferring wisdom
It’s not all about the money when it comes to leaving a legacy. It’s also about educating the next generation about how to effectively manage wealth and – most importantly – how to do it in an ethical way. The world may be changing but ensuring the wealth of future generations comes with imparting traditional financial wisdom together with guidance on how best to integrate innovation into their changing financial plans. While it involves the transfer of wealth, ultimately leaving a legacy involves ensuring that the values you live by are passed down from generation to generation.
