Make 2020 A Year Of Clarity

Christopher Long CFA ® , CFP ® , AAMS ® |

For many of us, leaving a meaningful legacy is a motivating force during our working years. That can mean different things to different people, but it’s likely the type of legacy you leave is important to you.

However, many heirs simply don’t know how their benefactor envisioned their legacy and are overwhelmed by the responsibility of sudden wealth. Some squander their inheritance in a few short years. Others are shocked to learn that their parent gave some, or all, of their money to charity.

Having the proper estate documents in place is the best way to ensure your heirs see your wishes clearly.

Although nothing can take away the pain of losing a loved one, having your financial life in order before your passing, will greatly reduce the stress of settling your estate. Detailing your wishes for your legacy can help give you the confidence of knowing those wishes will be carried out. For some, this is the last opportunity to explain to their children and grandchildren why they won’t receive an inheritance.

The beginning of a new year and a new decade is a great time to give your family clarity about your wishes. In addition to having a will in place, the following steps can help you and your heirs make intentional decisions about the future.

  1. Get your balance sheet in order! By clearly detailing assets and liabilities, as well as income streams, you will gain a better understanding of the value of your estate.
  2. Review the titling of your accounts. This is especially important if you leave a surviving spouse, or other dependents, who will need immediate access to those funds after your passing.
  3. Make sure your money goes where you want by designating beneficiaries. This should include anything that will affect your estate; retirement plans, life insurance, annuities, etc. These designations override your will so it’s imperative that they match your wishes. Your financial advisor can help. It’s important to periodically check your beneficiary designations to determine if they need to be changed. Marriage, divorce, births and deaths, as well as changes to tax laws, may necessitate changing your beneficiaries. It’s also important to list a contingent in case your primary dies before you.
  4. Create a tangible personal property memorandum. If you don’t want your daughters fighting over your great-grandmother’s ring after you die, you will need to document where you want your tangible property to go. Work with your estate attorney to draft this document.
  5. Write a letter of instruction. When you die your loved ones will be left without a critical resource, your knowledge! Detail how they can access your insurance policies, liabilities, investment accounts, pensions and other assets and benefits, and safely store that information with your will and other estate documents. Make sure to include that balance sheet you created! As part of your letter, you can also include your final wishes regarding funeral arrangements.
  6. Include a personal letter or video. Writing a personal letter, or better yet, creating a video, will give you heirs invaluable insight into your wishes. Detail how and why you chose to distribute your inheritance, and how you envision the legacy that inheritance will leave. Whether it’s giving all your money to charity, or helping your grandchild buy their first home, this may be your last chance to express your personal wishes.

Even if you’re young, it’s never too early to make your wishes clear. Taking the time now to ensure your estate is in order will save your family from the infighting and stress that occurs when the settling of your estate is left to probate. Many close families have become estranged after a contentious fight over an inheritance. Making your wishes clear will also give you the confidence of knowing that you have communicated your vision of the legacy you want to leave.

Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. and Intentional Wealth Strategies. Intentional Wealth Strategies is not a registered broker/dealer and is independent of Raymond James Financial Services.