Why Everyone Needs a Legacy Plan

As you near the end of your life, you’ll probably start thinking about what you want to happen to your assets after you pass. While some people may think estate planning is only for the wealthiest of us, that’s not necessarily true. Even if you have accumulated modest assets, you can still leave behind a meaningful legacy to the people you love and care about most.

In essence, you want to make sure you can protect what you’ve worked your whole life for, so you can pass it on to the people who matter most in your life. If you don’t consider some of the risks your estate might encounter, then you might be threatening the legacy you’ll leave behind.

Not sure what your estate plan should achieve? Below are some goals you may want to think about as you create your legacy plan:

Help your loved ones become financially stable.

One of the most powerful things you can do with your legacy is to provide financial stability for your loved ones. First, you’ll want to identify who you want to receive your assets. For example, if you’re leaving behind a spouse, you’ll probably want to make sure they can live the rest of their life comfortably. You may also want to leave something behind for your children, grandchildren or even a favorite charity.

After you decide who should benefit from your legacy, the next thing you’ll want to consider is how to transfer and distribute your assets. Maybe you’d like to use a trust that can help you avoid probate and have more control over asset distribution. You might also consider life insurance to help maximize the amount you leave behind. Whatever your decision, it’s good to have a vision in mind. Once you have that vision, you can then take steps toward turning it into a reality.

Reduce financial risks.

While you may not have enough assets to be concerned about estate taxes, there are still ample amounts of risk your estate could face. Probate is one such risk. The process can delay the distribution of your assets and can rack up significant administration fees.

If you have a 401(k) or an IRA, you’ll also want to think about the tax implications for your beneficiaries. If they take those assets as one lump sum, it might create a tax issue for them. It’s probably a good idea to talk with them and let them know they have options. For instance, instead of taking one lump sum, they could spread out the distributions over several years or their lifetime. This can help them avoid a large, one-time tax bill. However, they may find it helpful to know their options in advance so they can plan ahead.
Debt accumulated as a result of end-of-life medical treatment or long-term care is another risk you may want to consider. If you pass away with large, outstanding medical bills, your beneficiaries might be forced to settle them from your estate. Long-term care insurance and supplemental Medicare insurance are two tools that can help you minimize these out-of-pocket costs.

Prepare for incapacitation.

While it may not be pleasant to think about, there is a chance you’ll become incapacitated toward the end of your life. Often a result of illnesses like Parkinson’s or Alzheimer’s, incapacitation means you are unable to make or communicate your own decisions. If you don’t have a plan in place for incapacitation, your family may be forced to make financial and medical decisions on your behalf. And they may make choices that conflict with your wishes.

A living trust, a power of attorney or a living will are all things that can help protect you in the event you become incapacitated. A financial professional can help you review your risks and identify the tools that best meet your needs.

Ready to develop your legacy plan? Let’s talk about it. Contact us at Baacke Insurance Services for more information. We welcome the chance to help you analyze any remaining questions and develop a strategy. Let’s start the conversation today.

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

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