By Joe Gross, CDFA®
Oftentimes, when we think about leaving a legacy for our children, we think about writing a will and divvying up our wealth. But leaving a legacy is about more than just money. Will your gift ensure their security for years to come, or will it be a mess of assets, liabilities, and confusing records that takes years to sort out?
If you plan to pass your wealth to your children, it’s important to make the transition as smooth as possible. When your children are walking through grief and heavy decisions, they shouldn’t have the added stress of dealing with a chaotic inheritance process. Incorporating comprehensive legacy and estate planning can make this process much smoother.
The Importance of Estate Planning
Estate planning should be an integral part of your financial and retirement planning. Failing to have an estate plan may not have a significant impact on your own life, but it will undoubtedly affect the lives of your loved ones after you’re gone.
In the absence of an estate plan, your death will be considered intestate, which means there was no valid will in place at the time of your death. The state in which you lived will determine who inherits your property through a process called probate, which can take anywhere from 6-9 months or even several years without proper planning.
In addition to this process lasting a long time, your inheritors may face expensive fees, predatory claimants, and loss of control over what happens to your estate. Probate can cost up to 3-7% of your total estate value. (1) And because this process becomes public information, this means that greedy creditors or estranged relatives may attempt to claim portions of your wealth.
Good estate planning mitigates these risks and provides your family with a secure plan for how your wealth will be transferred. The professionals in your life, such as your estate planning attorney and financial advisor, can become trusted resources for your family to lean on during this difficult transition.
Create a Lasting Legacy
Additionally, good estate planning incorporates legacy planning, which can be even more beneficial to your inheritors. Legacy planning allows you to incorporate family or financial values into your wealth transfer. If your children aren’t as adept at money management or have made financial mistakes in the past, your legacy planning can help guide them through what to do with their new wealth. Finally, legacy planning may help to protect your grandchildren and encourage generational wealth-building for decades to come.
Leave an Inheritance You’re Proud Of
If you haven’t yet thought about the type of inheritance you’re leaving for your children, now is the time to do so. If the past two years have taught us anything, it’s that we never know what’s around the corner. As much as we dislike thinking about our mortality, the truth is that we can’t predict the future, and having a plan in place will provide some peace and comfort to our loved ones.
Instead of leaving your family with a mess, give them a lasting legacy that will enrich their lives and future generations. The JGP Wealth Management team is dedicated to supporting, educating, and providing informed direction to every client. If you partner with us, we will use our knowledge and experience to help you experience confidence, knowing someone is watching out for you (and your family). If you’d like to partner with a financial planner who understands your unique needs and inspires you to be more empowered in your financial decisions, contact Joe today at 503-446-6450 or firstname.lastname@example.org.
Joe Gross is first vice president and senior financial advisor at JGP Wealth Management, an independent, fee-based financial advisory firm in Portland, Oregon. With over 25 years of experience under his belt, Joe is passionate about putting his clients first and helping them stay focused on their financial goals, inspiring confidence in their future. As a Certified Divorce Financial Analyst® professional, he specializes in addressing the unique financial issues of divorce. Joe is known for his tenacity to keep clients on track toward their dreams and for his attention to detail, which is second to none! His clients know that nothing will slip through the cracks when working with Joe!Joe graduated from the University of Arizona with a bachelor’s degree in finance. Outside of work, he enjoys being involved in the community and is actively involved with organizations close to his heart. Joe is a former president and current board member of the ALS Association of Oregon and Southwest Washington and a long-time member of The Multnomah Athletic Club. In his free time, he enjoys fly fishing, spending time with his family, and cheering on his alma mater, the University of Arizona. To learn more about Joe, connect with him on LinkedIn. You can also watch his latest webinar on How To Pick Up The Financial Pieces After Divorce.