This past Sunday, I saw on the news that a pillar of our community passed away suddenly at age 38 of a heart attack, leaving behind a wife and 5 children. This man leaves behind a legacy of helping many vulnerable members of our society through the work that he did, and he leaves behind a legacy of personal values for his family, many of which were penned in a monthly column he did for a local magazine. It's sad that such a good person had to leave this world at such a young age. His life makes me think of my own, and what I can do in the next 5 years to start to leave the kind of legacy that I want to leave.
A legacy is so personal. Everyone has different ideas about the kind they want to leave. Some people want their legacy to involve charitable work. Some want their legacy to involve personal achievement, such as writing a book or qualifying for and running the Boston Marathon. Some people just want to be the best mother, father, or friend that they can be. All of these ideas about what constitutes a legacy are legitimate.
For parents, I would urge you to do at least 4 things to make sure that YOU leave a good legacy behind for your family:
1. Designate someone to care for your children if something happens to you.
Taking the time to designate guardians for your kids saves your family time, money, and a lot of heartache and drama. When you don't designate guardians, a judge has to decide, and this means that your family will spend time and money in court, that your kids may be wards of the state until the situation is sorted out, and that the kids may end up with someone you'd never choose. Make sure you name guardians to care for your kids.
2. Create a financial plan that allows your family to live comfortably if you're gone.
Either your income or your care (or both) will need to be replaced if something happens to you. If you are a working parent, most financial planners will suggest that you purchase a life insurance policy worth 10 times your annual income to supplement your lost earnings. If you are a stay-at-home parent, you need to purchase life insurance, keeping in mind that your surviving spouse would probably take time off work and have the added expense of childcare and possibly housekeeping costs. Not only do you want to replace income, but you also want to make sure that your money and assets will be available to your family if something happens to you. The only way to find out for sure what things would look like for your family if something happened to you is to meet with an estate planning attorney and have them show you what things would look like. If it looks like money and assets will be tied up, there are many different ways to plan to avoid that, and to make things as easy as possible for your family.
3. Protect the assets and money you leave behind from creditors, lawsuits, divorces, and immaturity.
Many surviving family members will lose their inheritance or spend it quickly because it is not protected. You have the option to leave your family's inheritance in a way that protects it from any creditors, lawsuits, divorces, and immaturity. Ask your lawyer if this is advisable in your situation. It will depend largely on your individual circumstances and how much you are leaving behind.
4. Leave behind guidance for your kids and their guardians and trustees.
An often overlooked element of an estate plan is the personal guidance. It's important to let your kids and their guardians and trustees know how you want them raised and how you want their money spent. Your family should have a personal account of your educational, financial, religious, and family values. When the guardians or trustees need to make a decision, they should be able to consult with the information that you have given them and easily make a decision that reflects your values, as if your hand is still there guiding your family.
Keep these four principles in mind, and you will leave a lasting legacy for your kids.
To your family's health & prosperity,
P.S. Want to get started on the most important planning you'll ever do for your family? Give our office a call at (503) 235-5150 to get started. You'll be glad you did.