“Legacy is not leaving something for people. It’s leaving something in people.” (Peter Strople, former Dell Computer Corporation director)

Leave a personal legacy, not just a financial one

We all know how important it is to our loved ones that we leave behind a valid will rooted in a comprehensive estate plan, but our legacy should go a lot further than just distributing assets.

Sharing with your heirs your values, your family history, and the wisdom your years have granted you can be one of the most important gifts you leave, often outlasting tangible bequests by generations. On a practical level, it will also help your heirs value, preserve and enjoy the wealth and the heritage that you leave them.

Start with a family mission statement

This sounds very corporate and complicated, but in fact it’s really simple and entirely personal. A family mission statement is foundational in legacy planning and will help everyone focus on the values and priorities important to them. As Stephen Covey (author of The 7 Habits of Highly Effective People) puts it “A family mission statement is a combined, unified expression from all family members of what your family is all about – what it is you really want to do and be – and the principles you choose to govern your family life.” 

Of course, the mission statement must be collaborative, and everyone, even young children, can share in putting it together. You never know who will come up with a bright idea or two!

There’s a useful downloadable worksheet here if you need help getting started – personalise it to your family’s situation, and adapt it as you go along.

Share and discuss your plans

Openly sharing and discussing your estate planning and the provisions of your will with your nearest and dearest isn’t just an opportunity to prepare everyone for the financial implications of your death. It’s also a great way to involve everyone in your planning and to ask for their input.

Discuss the financial structures you have already put in place, or are planning for the future. Talk about your vision for the wealth you will leave behind and why you have made the bequests you have. Sharing all that, and relating it all to your family mission statement, will significantly reduce the risk of unhappiness and disappointment when the time comes for your last wishes to be implemented.

Craft your “legacy letter”

This isn’t your will (although it’s sometimes misleadingly referred to as an “ethical will”).

What’s the difference? Your formal will, which must comply with all legal formalities to be valid, sets out who is to inherit what from you. In contrast, your legacy letter is an informal and personal letter from you to your loved ones, sharing with them whatever you think will be of value to them in their lives. It needn’t be just one letter – many people choose to write individual letters to each member of their family.

There’s a lot to be said for sharing all these things informally with your family while you are still around, but don’t stop at verbal discussions. Writing them down and leaving them in letter form will give your heirs a permanent point of reference.

What should you include in your legacy letter? Really, anything that you think will help your loved ones live richer and more fulfilling lives. Perhaps share some of your family history, stories of your own life and the lessons it has taught you, your values, and your hopes and dreams for each of them. What challenges have you faced and how did you overcome them? What was really important to you at each life stage? What are your most cherished memories? What stories and advice from your parents and grandparents really helped you? What principles have inspired your financial successes?

The Confucian advice to “Study the past if you would define the future” rings as true today as it did two and a half thousand years ago.

A practical five-point plan brings it all together

1. Your estate plan underpins everything, so review and update it regularly.
2. Take legal and tax advice on forming a family trust. Depending on your circumstances and objectives, it could be the perfect way of guaranteeing that the financial part of your legacy is protected and managed wisely for generations to come.
   
   As to the more personal side of your legacy, the trust’s name itself will preserve your family name no matter how many of your descendants may in due course acquire new surnames.
3. Most importantly, leave behind a valid and updated will (“Last Will and Testament”) that clearly reflects your wishes and complies with all legal formalities.
4. To accompany your will, put together a “Notes for my executor and loved ones” file with all the information and documents that your executors and heirs will need when the time comes.
5. Last but certainly not least, be sure to include your legacy letter. This ensures that you aren’t just leaving your family all your worldly wealth, but also a real legacy – your own personal message for the future, direct from you to them.

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.

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