Estate Planning – Are your Values Present?

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As clients near retirement, it is obviously very natural to have changes to their overall estate plan. Clients have spent most of their life accumulating wealth and want to retain as much as possible to pass onto future generations in a tax efficient manner. When one hears estate planning, this is generally what they think of – the financial side. We obviously know the importance and spend a good amount of time helping to educate our clients on different gifting techniques they can leverage.

Whether you plan for it or not, the emotional and social aspects of your capital are also a part of the estate you pass onto your children and grandchildren. Typically, advisors spend a lot of time talking about how to pass on the financial capital and very little time discussing how to further pass on the family’s values, work ethic, philanthropy and emotional capital.

At a young age, many of us were taught to not talk about money. But when parents are successful, their children recognize they are living a more privileged life. Therefore it is important for the family to have an open dialogue concerning money, values and philanthropy. Ask your children what they understand about your family’s financial situation? Do the children understand what your intentions are for the money? How will the children feel if they are each treated differently financially? How will your children feel if you leave a large percentage of your net worth to a favorite charity? Do your grandchildren know how you want future generations to impact the community?

If philanthropy is an important part of your life, get your family involved early. Volunteer together at your favorite charity. Also encourage them to pick a cause they want to be involved in and spend time together there volunteering.

It is important to define a strategy so that the financial, social and emotional portions of your estate are all accounted for and working together. Once this plan is established, the ongoing monitoring and the communications among family members become critical. We recommend having annual family meetings for evolving discussions. Think of your long term estate plan like a successful business owner would think about his long term strategic plan.

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