Legacy Law Blog

Part 1 of a 2-Part Series

I have a memory from childhood that involves my mother telling me that there are two guarantees in life, death and taxes.  Being a young child at the time, I didn’t really understand or appreciate the implication, or the absolute truth to her words. 

However, now that I am at a much more advanced age with children of my own, I have received the gift of wisdom. Not only do I understand and appreciate the adage, I recognize that I am on the other side of the proverbial hill. I can honestly say I have reached that point in life where I think about a bucket list, living life to the fullest, finding joy and abundance in every area of my life, and practicing daily gratitude.  I frequently think about my legacy, what it means to me, and what steps I need to take to create and protect it.

What is a Legacy?

Legacy is a term often used and understood by professionals but isn’t necessarily a definition your neighbor could give. So, what is a legacy and what is legacy planning? 

The short answer says your legacy is how you want to be remembered by others after you die. What is it about you as an individual that makes others remember who you were, what you stood for, how you treated others, and what made you uniquely you.

Legacy planning focuses on creating the legal roadmap to support the values and financial objectives you want to leave behind for the people who mean the most to you. Legacy planning is the written way you are remembered and can be as simple or complex as needed to achieve your goals. 

One of the key components of legacy planning is the estate plan. An estate plan is the written, legally enforceable roadmap which not only supports the financial goals and objectives of the deceased, but also provides an opportunity to employ core values that were the deceased’s guiding light in the decision-making process. Estate plans can be as simple as a Last Will and Testament or as complex as multi-layered trusts and family LLCs. 

Everyone’s personal situation will be slightly different. If you’re someone who values a work ethic, putting assets into a trust that distributes income only after the trustee considers W-2 income and other income producing assets is one way to encourage gainful employment for future beneficiaries. If you’re someone who wants to create a safety net or wealth for multiple generations, then putting assets into a trust that only distributes income will assure those assets have the timeline necessary to appreciate and provide income for many years to come. 

It’s these types of goals that cannot be achieved without planning. If you don’t create your own plan, the state in which you live will have a statutory plan, and it will more likely than not result in an outcome that was never what you anticipated or intended. So why aren’t more people controlling their legacy outcomes?

Death as an Economic Factor

Our free-market economy results in death as a money-making opportunity for many entities. Those that immediately come to mind include churches and charitable organizations, funeral homes, cemeteries and crematoriums, masons, casket and urn manufacturers, restaurants and caterers, florists, newspapers, and the medical and legal professions. And let’s not forget the government. Whether it’s in the form of taxes owed at death or the county probate court, the government makes money on your death. These entities count on the fact that at some point in time, we all die and so they provide a service that is part of the experience. 

For the rest of us, we think about death in non-monetary ways, especially when life throws us a curveball like a scary health diagnosis or the loss of someone dear to us. But we certainly don’t dwell on it or prosper from it. To be crystal clear, I am not disparaging the people who make a living, either directly or indirectly, from death, but instead acknowledge there is a need for the services they provide. These services bring closure, peace and certainty to what is an otherwise an unpopular and highly emotional subject. 

Death Will Happen… Someday

The prospect of death makes us uncomfortable and so it often results in a reluctance to talk about it, let alone plan for it. One thing I know for sure, ignoring or denying death does not make it go away. We don’t have the ability to let death only happen to others but not to ourselves. Can we honestly say death will never happen to us? Of course not! 

For anyone who has ever experienced grief, it is an emotionally painful and long-lasting process from which some of us will never quite recover. We have all heard stories about couples who spend almost their entire lives together and when one dies, the survivor joins them shortly thereafter. It’s a bittersweet ending that gives many of us hope for true love, or appreciation for the love we have.

But what is it about death that keeps us from doing the things deep down inside we know are necessary to prepare?  I have theories and they involve the nature of the human brain and how we are programmed from our very beginning to survive as a species.

In the next installment of this series, we will examine what keeps us from taking action to preserve our own legacies. I will also provide a case study that illustrates the advantages of legacy planning as a final act of love.