Leaving a financial legacy for the next generation includes more than making financial decisions. It is a process that involves traditions and emotions as you think about providing for your loved ones, business partners or favorite charities after you are gone. Creating a financial legacy strategy to ensure your wishes are carried out provides comfort and peace of mind.
Being prepared with a blueprint for asset transfer involves these steps:
Identify your objectives — as you plan how your financial legacy will be distributed, think about the needs of those you leave behind.
Will your surviving spouse be able to manage financial matters or require assistance?
If you have a special-needs child, ailing spouse or elderly parent, how will they be cared for after you’re gone?
How will you address your children’s education funding needs?
If you own a business, have you created a strategy for its transition?
To help document important information, ask a Farm Bureau agent for a copy of the Personal Journal of Wishes and Records®.
Inventory your assets — it’s easy to underestimate the value of your assets, so as you calculate the worth of your estate, in addition to high-value items like your home, business, vehicles, etc., be sure to include:
Retirement accounts
Life insurance and annuity policies
College funds
Stocks and bonds
Special personal property like wedding china, baseball card collections, antiques, jewelry and other collectibles
You’ll also need to identify liabilities — mortgages, car payments and business loans — and communicate the location of important documents including titles and deeds. It is also helpful to list your possessions using the Farm Bureau Home Inventory Kit or Farm/Ranch Inventory Kit.
Work with a professional team — to help ensure proper distribution of your estate and avoid paying unnecessary estate taxes and settlement costs, it is important to consult with professionals like your accountant, insurance agent, financial adviser, estate-planning attorney and banker. Use a qualified attorney to draft documents — wills, trusts, durable power of attorney and advance medical directive — to be sure your directions are carried out appropriately.
Keep your strategy current — review your financial legacy strategy often to make sure it is on track with your wishes. Life changes — marriage, divorce, birth, death, acquisition of property, change in financial status or a move to a new state — can be a reason to examine the arrangements you’ve made.
Charitable giving
Once the needs of your loved ones are addressed in your financial legacy plan, you may want to leave something to nonprofit organizations or institutions that are near to your heart. Consider these factors as you make decisions about charitable giving opportunities:
What to give — assets given to nonprofit organizations can include cash, CDs, savings bonds, public stock, life insurance, real estate, personal property and retirement funds. Talk with your advisers about the tax implications of your gifts.
Where to give — you can give to a nonprofit organization, charity or scholarship fund. You may wish to establish a new scholarship fund in honor of someone or something dear to you.
How to give — there are many options for making donations; direct gifts, private and community foundations, and planned giving are just a few. Consult your Farm Bureau agent or other trusted advisers to help determine the best charitable giving method for your situation.
Preparing for the future
If you plan to leave your assets to loved ones and/or entrust them to a charitable organization, an estate strategy can help you:
Clearly communicate your wishes, even if you become unable to make your own decisions
Preserve your assets
Leave a contribution for future generations
Maximize your wealth by minimizing estate taxes and other expenses
Avoid delays and additional costs such as probate
Leaving a financial legacy is a lovely way to be a part of the next generation. Let Farm Bureau Financial Services help make that happen — find a local agent now.