By: Colleen Weber
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By Colleen Weber, CFP®, CPA
We all want to leave a legacy for our children after we’re gone. But what will that legacy look like? Have you thought about the type of inheritance you’re leaving for your kids? Will it be a gift that ensures their security for years to come, or a mess of assets, liabilities, and confusing records that takes years to sort out?
If you plan to pass your wealth to your children, I think it’s important to make the transition as smooth as possible. While your children will likely be overwhelmed with grief, they shouldn’t have the added stress of working through a chaotic inheritance process. Incorporating comprehensive legacy and estate planning can make this process much easier.
The Importance Of Estate Planning
Estate planning should be an integral part of your financial and retirement planning. Failing to have an estate plan may not have a significant impact on your own life, but it will undoubtedly affect the lives of your loved ones after you’re gone.
In the absence of an estate plan, your death will be considered intestate, which means there was no valid will in place at the time of your death. The state in which you lived will determine who inherits your property through a process called probate, which can take anywhere from 6-9 months or even several years without proper planning.
In addition to this process lasting a long time, your inheritors may face expensive fees, predatory claimants, and loss of control over what happens to your estate. Probate can cost up to 3-7% of your total estate value. (1) And because this process becomes public information, this means that predatory creditors or estranged relatives may attempt to claim portions of your wealth.
Good estate planning mitigates these risks and provides your family with a secure plan for how your wealth will be transferred. The professionals in your life, such as your estate planning attorney and financial advisor, can become trusted resources for your family to lean on during this difficult transition.
Leave A Lasting Legacy
Additionally, good estate planning incorporates legacy planning, which can be even more beneficial to your inheritors. Legacy planning allows you to incorporate family or financial values into your wealth transfer. If your children aren’t as adept at money management, or have made financial mistakes in the past, your legacy planning can help guide them through what to do with their new wealth.
Your legacy planning can also ensure your children use the inherited wealth to continue providing security for all members of the family, and not to pay for unnecessary luxuries. Legacy planning may help to protect your grandchildren and encourage generational wealth-building for decades to come.
Leave An Inheritance You’re Proud Of
If you haven’t yet thought about the type of inheritance you’re leaving for your children, now is the time to do so. If the last year has taught us anything, it’s that we never know what’s around the corner. As much as we dislike thinking about our own death, the truth is that it could happen at any time.
Instead of leaving your family with a mess, give them a lasting legacy that will enrich their lives and future generations. If you choose to partner with me, I will use my knowledge and experience to help ensure your family is well taken care of so you can enjoy peace of mind knowing someone is watching out for you (and your family). Book a free introductory meeting online or call (952) 470-0750 today.
Colleen Weber is a fee-only financial advisor, CERTIFIED FINANCIAL PLANNER™ professional, and CPA with more than 15 years of financial planning experience. Providing comprehensive financial planning and wealth management, she specializes in serving clients nearing retirement, retirees, busy professionals, and women. She is passionate about developing financial plans that save clients on taxes, and investment strategies that help them pursue their goals. Learn more about Colleen by connecting with her on LinkedIn or booking a complimentary phone call meeting.