When Jennifer’s father died, her first worry was about her mother and how she will recover. Her mother was so shocked and saddened when it happened that she didn’t want to get out of bed and face the world, let alone deal with paperwork. Luckily, Jennifer’s father had everything in order, allowing her, her mother, and her siblings to focus on grieving instead of being bogged down in financial paperwork and family bickering.
In a recent survey, relieving the burden on loved ones was the top benefit cited as the main reason why people over 55 get their legal and financial affairs in order. Unfortunately, only about half of those surveyed indicated that they have estate planning in order, even though they acknowledge that their lack of proper end-of-life preparation could leave a mess for their families.
For the survey, Merrill Lynch and Age Wave interviewed more than 3,000 Americans ages 55 and older to gain a comprehensive look at attitudes and practices surrounding legacy planning. The resulting study, “Leaving a Legacy: A Lasting Gift to Loved Ones,” explores a range of topics, including what people most want to be remembered for and the benefits of having your affairs in order.
Passing Along Your Values
A well-prepared legacy can be one of the greatest gifts we can leave to those we love. Most Americans care very much about their legacies—how family and friends will remember them and how heirs will benefit from inheritances passed along. Those surveyed acknowledge that they need to plan for their later years and get their affairs in order. The following is a sampling of some of the findings from the study:
- What legacy is all about: Legacy is more about who you are and how you’ve lived than what you’ve accumulated. 94% of survey respondents say that a life well lived is defined by relationships and contributions far more than career, wealth, or fame. To them this means having loving family and friends.
- What they want to be remembered for: When asked what they want to be remembered for, more than two-thirds of survey respondents said it’s the memories shared with loved ones, and that’s the case regardless of their level of wealth.
- Why they leave inheritances: Nearly 6 in 10 Americans plan to leave inheritances to their heirs. They leave inheritances for both emotional and pragmatic reasons, including providing loved ones with financial security and covering funeral expenses. But the most common reason, cited by nearly half, is that it’s the right thing to do.
- Giving while living: One of the biggest shifts in mindset around inheritance is that most Americans now favor the idea of “giving while living.” Two-thirds say they prefer to distribute part of their estate while they are still alive. That provides both a means of directing the distribution and the opportunity to see the inheritance benefiting the next generations.
- Distribution of assets: While distribution to children tends toward equal shares, two-thirds of Americans currently say that a child who provided them care should receive a larger inheritance than children who did not. Only about 25% of respondents felt that a child who has his or her own children should receive a larger inheritance than one who does not. 60% say that stepchildren should receive the same amount of inheritance as biological or adopted children.
- Pragmatic worries at end of life: In addition to becoming a burden on loved ones (66%), pragmatic worries at end of life include running out of money due to medical expenses (59%) and receiving unwanted medical treatments (51%).
- Rights and choice at end of life: 96% believe that every person deserves to maintain dignity, and 97% say that people should have the right to die in their homes if they wish.
- An advocate to look out for them: 43% are concerned that they lack an advocate to look out for their best interests as they age.
- Parents should initiate conversation: 87% say it’s a parent’s responsibility to initiate a conversation with their children about their legacy.
Why Create a Legacy Plan?
What do you want to be remembered for? It’s a question that most people contemplate at least once in their lives. Perhaps it’s the adventurous sense of spirit that takes you to all corners of the earth. Or maybe it’s the incredible kindness you show to your loved ones. But what about the impact you want to have with your more tangible assets?
This is where legacy and estate planning can come into play. Estate planning ensures that you have a plan for incapacity and death, and that your assets are distributed according to your wishes. Legacy planning is about giving your estate plan a sense of purpose. This may also include philanthropic goals in addition to family beneficiaries.
How to Create a Legacy Plan at the Farr Law Firm
An estate plan that imparts your values, using a legacy letter, goes beyond deciding who gets what and how much after you die. A legacy letter addresses your aspirations before you die — the things you hope to achieve in later life — and what legacy you want to leave behind besides your assets.
The easiest way to create your legacy letter is using two tools that our Firm, the Farr Law Firm, provides to all of our clients as part of all of our levels of lifetime protection planning:
1) Our proprietary Long-term Care Directive™ includes a built-in legacy letter that simplifies and expedites the writing of your legacy letter.
2) The Legacy Stories website (and accompanying mobile app) is a no-cost service that we provided to all of our clients, and all readers of our newsletter. Find out more here.
Make Sure Your Legacy Plan Stays Up to Date
- Once you have your plan in place, remember that it is not static. The only way to ensure that your plan truly reflects who you are, what you care about, and what you have today is to have your documents reviewed and updated frequently. Changing circumstances may dictate the need to change your plan. Here are some of the times you may consider reviewing – and/or changing – your legacy plan:
- Family member experiencing estate and/or health issues
- Change in government policy and/or estate or tax law
- A liquidity event or large changes in net worth
- Changes in your relationship with your beneficiaries
- A new beneficiary, such as a child
- A move to a new state
- Divorce
- Marriage – first and especially second
- More involvement with charity
- Every five years based on potential changes in tax code
Click on our article on this subject for more details.
Plan in Advance for Peace of Mind
As you can see, legacy planning and estate planning are very important. Please call us today if you don’t have your planning in place or if you would like to make any updates.
We here at the Farr Law Firm have strategies in place to help all types of people at all ages to plan for themselves and their loved ones, and ways to convey your legacy to your loved ones. By planning in advance, each person can retain the assets it has taken a lifetime to accumulate and the peace of mind that their family’s needs will be adequately and properly addressed.
Estate Planning Fairfax: 703-691-1888
Estate Planning Fredericksburg: 540-479-1435
Estate Planning Rockville: 301-519-8041
Estate Planning DC: 202-587-2797
About Renee Eder
