Most high-net-worth individuals have been working hard for a long time before they arrive at the point they get to enjoy their wealth. One could have been building a business, enjoying a decades long focused career, or another hard trodden path to wealth and stability. Regardless of the specific path, the fact of the matter is that most people do not start thinking about their legacy until they are near the end of their journey. This is a mistake, not only because it pays to have a plan, but because having a guiding force propelling one forward can make decision making throughout their life easier and more purposeful.

If you are already wealthy or well on your way to wealthy, you have likely learned the lesson that money does not buy happiness. Money buys goods and services that can make our lives more interesting, more fulfilling, or even easier, but it does not drive our emotional and mental states towards contentment. For that reason, often people realize too late, had they been planning their legacy for longer, they may have made choices that did more to add fruitful connection and belonging to their lives earlier. Typically, in the financial advisory business, legacy tends to promote two main topics of conversation: providing for family and charitable giving. Both are worthy and important goals, but often forgotten is a third component: eulogy content. These are the soft skills that are often most spoken about us when we are already gone. In your eulogy what would you like to hear? That you were a caring and thoughtful parent, an honest mentor, a philanthropic giver, a community builder, or simply a reliable friend. These three components are all key to building your legacy and they are all important to our own personal goals.

Family Matters

Whether you have children of your own or a large extended family you want to be able to support, you have probably thought about how your wealth might be best put to use for your loved ones. This can include gifting while you are still alive, planning your estate for its final distribution, and teaching lessons to the next generation about what you have learned so far.

Everyone’s family is a little different in this respect. Depending on your own situation you may be worried about fairness between children, equalizing previous gifts, or managing delicate family dynamics. No matter your situation, it is important to think about what your ultimate goals are. Likely you want to see everyone walk away content with your decisions and feeling as though you put thought into your financial legacy. The best way to make this happen is to have clear instructions on what your intentions are. Even better, you should discuss your estate plans with your loved ones ahead of your passing. This can do wonders to clear the air and make your intentions known. If you take nothing else from this article, take this message: clear and honest communication about your intentions will make the handling of your estate easier. Even if you are worried about the reaction of one or more parties, you would rather they have that understanding now, than make the handling of your estate more difficult when you are not around to explain yourself.

Philanthropy

There are many stances to take on the topic of philanthropy. Some feel their dollars will not effectively be used by major organizations, others are committed to contributing real dollars and cents back to their communities, and still others might feel their philanthropic goals are more important than providing more wealth back to their families. No matter what your stance or approach is, there are appropriate solutions for you.

Tax wise, donating money or securities may represent a tax savings opportunity, especially if you are in a high-income year with no other ability to defer or reduce your taxable income. If you are interested in leaving a philanthropic legacy behind, we can assist you in finding the best possible solution for you. Often this is as simple as assisting our clients to donate shares of the investments they own to charitable organizations. Donating shares comes with some additional tax savings, assuming that investment is currently trading at a capital gain. If you own an investment that is currently worth more than you paid for it, selling it and donating the cash would mean you pay taxes on the capital gain incurred. Whereas, if you donated those shares directly to your favourite charity, you would not be required to pay the tax on the capital gain, however you would receive a tax receipt for the full market value of those shares.

If you are more serious about your philanthropic goals, we are also able to assist you in starting and maintaining your own private foundation. Often, individuals may do this by using a donor advised fund. Simply put, this is an investment account you can donate cash or securities into, and then direct how those funds are disbursed in the future. This can be especially useful if you are in an exceptionally high-income year and want to make one large donation but would prefer to be able to direct these funds to your selected foundations over a longer period than one year. If you would like to learn more about setting up your own donor advised fund or the tax benefits of donating securities, feel free to give us a call at 403-260-0568.

What will your Eulogy say?

This can be an awkward topic to discuss, it is by its very nature an egotistical thought to wonder “what will people remember about me when I am gone?” To make it slightly less awkward, we should consider the fact that this is the only part of our legacy every one of us can control regardless of our level of wealth. If you spend your time and energy dedicated to being a good family member, mentor, or community member, you can rest easy knowing you have done what you can to improve the lives of the people around you. This can be as simple as lending help and expertise to those younger and more inexperienced than you, or it could mean you were a reliable friend or confidant to those people most important to you. Regardless of what that looks like in your life, it is a vital component of your legacy because it is often the most meaningful to our lives in the present.

In summation, most people’s legacies are a mix of all three of the above components. Where allocate your focus is up to you. No matter what you prioritize, you should start early in your efforts to leave a good legacy. The longer you spend working on the impact you will make on the world, the greater that impact will ultimately be. Additionally, if you are thinking about your legacy early, you will likely find you are driven to achieve this legacy, and often that means you have more fulfilling experiences, a better understanding of what you are working towards, and ultimately a plan in place for how you want to see your impact reflected on the world.