Legacy Planning and talking to your loved ones about the potential of losing you is never easy! Legacy planning is an integral part of risk management. Risk includes the possibility of loss that can affect personal property, financial legacy, and your dependents. You can think of risk management as the process of identifying your risks, analyzing how you want to accept or mitigate them, and implementing a strategy to do so.

The goal of personal risk management is to protect what you create: your goals, dreams, wealth, and well being. and while you may not be able to eliminate all of them, you can at least cover the risks that are most affordable.

While we can’t eliminate all risk, there are ways to avoid, minimize, or protect yourself and your family. With clarity and planning, you can manage your risks, better prepare for unexpected life events, safeguard your financial status, and protect your loved ones. 

Here are some examples:

• Life Insurance (very affordable when you’re younger)
• Disability Insurance (very affordable when you’re healthy)
• Personal Property & Liability Insurance (depends on where you live, how many assets you are trying to effect
• While this isn’t insurance, another way to protect what you have is doing Legacy Planning (often called estate planning, where you work with an attorney to create legal documents to direct your assets after your death) Legacy planning is the act of preparing how you will bequeath your property and assets to your loved ones after your death. It’s more or less a synonym of estate planning, but the term has gained popularity among financial advisors in recent years. This is perhaps because “estate planning” has come to evoke death, or perhaps because “estate” is associated with the wealthy. 

Here are some suggestions to consider when you begin writing a will and legacy planning:

Talk to a financial advisor:  A financial advisor can help you make decisions and ensure that you are factoring in all the various scenarios. Your advisor can be a sounding board for your ideas and in some cases will act as the liaison to an attorney and/or accountant should you need one.

Find an estate attorney: If you have a particularly complicated estate, an attorney can be very helpful in helping you understand it and plan for your future. Your financial advisor can also be a good place to start your journey of finding the right attorney.

Make a list of all your assets: Your attorney will probably also ask you to do this as a first step so it would be beneficial to have this list ready ahead of time. Include all your assets, money, investments, properties and even inheritance in order to plan for your future. Think about if all of your assets will pass to your spouse/partner or if there are specific items that you want passed on to certain individuals.  

Keep all your legacy and estate documents in a safe place: This is a very important but often overlooked step. Your plan will be organized once you gather all your important documents including gathering insurance policies, your will and other executed estate planning documents, a list of tangibles (jewelry, family heirlooms, etc).

Assign beneficiaries to all appropriate accounts: This includes formally assigning your active life insurance policy to your desired beneficiaries, any IRA or 401(k) accounts, brokerage accounts, other employee sponsored plans, etc. Not only should you make sure all these are in place, but you should review them annually to be confident nothing has changed.

Finally, be sure to let a trusted loved one know about your plan and where to find it. Be it your partner or kids, they are a part of your wealth and need to know your values and goals as well your planning for the future.

Conversations around money can make us feel vulnerable or uncomfortable. But people who tackle financial discussions head on are less likely to feel isolated and prioritize other aspects of their health, wellbeing and future. Having open conversations with your partner, parents, siblings, and children help you and your loved ones become more financially healthy. And the time to have this conversation is now, because when a crisis hits, it’s too late. The best time to talk about it is before the diagnosis, when everyone is healthy. A trusted financial advisor can help you have these conversations and can recommend how to approach family members, especially if you think they may have different ideas about your legacy than you do.

Remember, Team Willow is here to help you through this process.

*Caring.com’s 2024 Wills and Estate Planning Study