How to Start the Legacy Planning Talk With Your Family

Creating a legacy plan is a critical part of ensuring that your assets and property are appropriately distributed when you pass away. But sharing those intentions with a financial professional and your loved ones may be important as well. A financial professional can help point out factors that you may not consider such as the tax implications for passing down assets. And sharing the details of your legacy plan with your family or a trusted contact can help them feel confident about what your wishes are and how to fulfill them.

Ideally, discussions about legacy planning will take place on an ongoing basis. Explore these five topics during the first conversation with your family or trusted contact.

1. Discuss your assets and liabilities

 

Prepare a comprehensive list of your assets – including cash, investments, and real estate – as well as debts. Providing this information to your family or a trusted contact can help them better understand the scope of your estate and any potential actions they may have to take when they inherit it.

For example, is there property that may need to be sold? Is there a trust that may require contact with a third-party trustee? Is there a business that may need to be transitioned?

2. Share the location of your important documents

 

Before talking with loved ones or trusted contacts, gather your legacy planning documents, such as your will, living will, power of attorney, trust documents, and stock certificates. After gathering the paperwork, you can store these documents with an attorney, for instance, and tell your family or a trusted contact how to reach out to the attorney.

3. Identify legacy planning roles

 

Clarify what your loved ones’ or trusted contacts’ responsibilities are. Discuss who will take on the roles of power of attorney, health care proxy, and executor.

4. Make your intentions known

 

Though there will be instructions in your will, communicating the thought process behind your legacy plan can be beneficial. Offering clear reasoning behind specific decisions such as philanthropic gifts and guardianship of children can help your family or a trusted contact execute the plan with certainty when the time comes. It also offers you the opportunity to pass on family values such as a commitment to charitable giving.

5. Explain your protection plan

 

Describe the measures you’ve taken to help protect your legacy. For example, you may have life insurance policies with cash value that can be tapped into if you need medical care in retirement, or policies that provide immediate cash when you pass away to pay estate taxes or debts. Additionally, you may have annuities that can provide steady income to a spouse or others in the event of your death.

Sharing the details of your legacy plan with your family or a trusted contact can help ensure that they’re prepared to carry out your wishes. Review your legacy plan with your financial professional and attorney every few years, or as circumstances change, to discuss necessary updates.