When starting the estate planning process, you may hear the term “legacy planning.” There is a current trend to replace the former with the latter to give a fresh face to the process. Is estate planning and legacy planning synonymous? Yes, and no. Everyone has an estate, but not everyone leaves behind a legacy.
Curating and cultivating a lasting legacy is more profound than a transfer of assets to a beneficiary. Legacy planning is a comprehensive strategy to preserve and continue honoring the past, far into the future.
Definition of legacy
Merriam Websters’ Dictionary defines the word legacy as “a gift by will especially of money or other personal property.” This first definition is where the connection to estate planning is made. However, the second definition says “something transmitted by or received from an ancestor.” For example, law, medicine and philosophy are legacies of ancient Greece that we have received, continue today and will exist into the future.
So, yes, it is correct to say, “My parents left me a legacy of 50 million dollars.” However, it is equally correct to say, “My parents left me a legacy of a rich family history that included philanthropy, a love of the arts and a set of deeply held ethics.”
Legacy planning is a part of estate planning that considers more who you are as opposed to what you have. Legacy planning takes into account many factors, such as:
- Family or societal history: Legacy planning can help to preserve a shared family history or that of a society membership. This can be done through many means, including archiving or a museum exhibition.
- Business succession: After spending a lifetime building a successful business, planning the future of your business can be a way to plan for a legacy. A succession plan helps to chart a course for your business that aligns moral compass is best when building your legacy.
- Charity: Some choose to continue their legacy through establishing foundations, associations, trusts and scholarship programs. These are estate planning strategies designed to preserve someone’s legacy.
How a person may want to preserve and plan for their legacy is as varied as the legacies themselves. The above is a great place to start.
If you haven’t yet considered the legacy that you will leave behind, now might be the time.