For many people, leaving a financial legacy is an important goal.
With the right planning, you can have an incredible lasting impact on future generations. This can be a legacy that you leave for your family or perhaps for your favourite charity.
Regardless of who benefits, it can be nice to know your lifetime’s hard work will help others for many years to come.
In this article, we explain exactly what a financial legacy is and how you can build one over time.
How a legacy is different to an inheritance
A financial legacy and a financial inheritance are related concepts, but it’s important to note that they are not the same thing.
A financial inheritance is the transfer of assets from one person to another after the death of the person who owned the assets. This can include things like shares, real estate and cash.
A financial legacy, however, refers to the overall impact that someone has on the financial well-being of others once they’re gone. For example, leaving a financial legacy can involve the passing on of a trust fund, charitable foundation, successful business or investment portfolio that generates income for future generations.
Planning your financial legacy
When you think about the financial legacy you want to leave, what does it look like? Below are some of the key things to keep in mind during the planning process.
- What do you want your legacy to be? Think about which causes you want to support to ensure your legacy aligns with your personal values.
- Who will benefit? Consider which people you want to benefit from your legacy and how you want it to impact their lives. Remember, it doesn’t have to be family, it could be a charitable cause or a combination of both.
- How will you execute your legacy? Think about the specific steps you need to take to ensure your legacy is carried out according to your wishes. This will involve creating a will or trust, setting up a foundation, or establishing a business or investment portfolio. You also need to think about Powers of Attorney, Advance Care Directives and other important documents to ensure that the right decision makers are in place, and the right decisions are made, irrespective of circumstances.
- Who will help plan your legacy? Consider engaging a financial planner to assist with the planning of your legacy to ensure your wishes are carried out according to your desires.
While Aussies have typically been casual about the legacy planning conversation, or avoided it entirely, it has never been more important to get your house in order.
According to the Productivity Commission, Australians are living longer and dying richer. The Baby Boomer generation is expected to pass on an estimated $224 billion by 2050, which is a 4X increase over 30 years.
Your piece of this pie matters.
With a legacy planning strategy, you’ll ensure your wishes come to fruition, and you can continue to protect and provide for your loved ones or support the causes you hold dear.
At Heard Financial, we have a team of advisers who can help tailor a plan to suit your unique circumstances.
For a no obligation discussion about how to leave a financial legacy, contact us today.
This information may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information.
Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it. Where the information relates to a particular financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product.