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Heirlooms: Your Guide to Legacy Planning

Excerpts from “Heirlooms: Your Guide to Legacy Planning,” an interview with Personal Capital’s Senior Estate Planning Strategist Jason Largey, originally featured in the quarterly magazine Confident Money. (Digital Subscriptions to Confident Money are free.)

Unintended consequences. Of all the reasons Jason Largey says you should have a legacy plan in place, the outcomes that you cannot foresee should be enough to grab your attention. There are no crystal balls here. Nobody knows what’s going to happen today, tomorrow or the day after that.

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So, go ahead, imagine the people in your world and the assets you own. What happens if you suddenly pass away? What if it happens unexpectedly? Are all of your affairs and estate in order? Is there a plan in place to properly account for and distribute everything you’ve worked so hard to earn?

Now, imagine all this could happen without any say from you – if you had no estate plan, or an outdated estate plan.

Preparedness is Key

These are tough things to think about, and even tougher to discuss. “The urgency rests in the fact that this scenario happens regularly,” says Largey, Senior Estate Planning Strategist with Personal Capital. “What would you want to happen to the assets in your estate if you passed away? That question should get a dialogue started. Sitting down to do legacy planning gives you a sense of purpose – a feeling that you are doing something for the greater good. It’s easier to go through these decisions when you decide, instead of decisions happening without your input. Leaving things to chance could divide your loved ones and tarnish your memory.”

The truth is that too many people are not properly prepared for how their estate and wishes will be honored. And that is disconcerting when there’s so much at stake – your bank and brokerage accounts, retirement plans, real estate, insurance, annuities, business interests, and other assets.

Largey admits that the planning process is as complex as it is overwhelming – both financially and emotionally. Over the years, he has seen too many families suffer through the aftermath of what happens when somebody was not prepared for the end.

If it’s Now or Later, Take Now

Each situation is different. People are married, or not. They have children, or they don’t. There are ex-spouses, remarried partners and stepchildren. There are homes, vacation homes, 401(k) retirement plans, IRAs, life insurance policies, etc.

It’s like a Lifetime movie, except it’s not. The scenarios are all too real. People die. Assets don’t get properly distributed. Families go to war with one another.

Why? “The biggest reason is procrastination,” Largey says.

Four Steps to Kickstart Your Legacy Planning

To help you get started on creating your legacy plan, Largey offers these four steps:

  1. Take a snapshot of your assets and current life circumstances. This includes accounts such as brokerage, bank, retirement, real estate, valuable personal property (vehicles, family heirlooms, jewelry, artwork.) Make sure you identify digital accounts and digital assets you have accumulated. Review whether or not you or a close family member experienced a major life event such as birth, marriage, divorce and/or death.
  2. Select an executor/trustee/agent. If you could not speak for yourself, identify the person you would want to manage your estate as an executor or trustee until your heirs are ready. This would include a Last Will and Testament, Revocable Living Trust, etc. Identify who would make your financial decisions for you, under a General Durable Power of Attorney and who you would want to make medical decisions for you using a Medical Power of Attorney, or if a Living Will makes sense.
  3. Update or Create Your Estate Plan. Ensure your current intentions are reflected. Update or review your estate plan every three to five years. Confirm the beneficiary designations in your 401(k) retirement plans, IRA accounts, life insurance policies and bank accounts.
  4. Communicate your decisions to the key people in your life. Make sure your potential heirs – i.e., family, friends, charitable organizations – have an idea of what they might receive. Make sure the key people – your executor, trustee, agent – have a copy of your estate plan.

Our Take

Legacy planning can be complex and overwhelming – both financially and emotionally. Careful planning and strategic foresight is required to successfully provide for your current and future financial needs. This is one of the many areas of financial planning that Personal Capital can assist clients with. Contact your Personal Capital advisor for more information.

This piece was originally featured in the Spring 2018 issue of Confident Money, a quarterly magazine sponsored by Personal Capital. Confident Money endeavors to tackle the issues that matter most by sharing stories and insights that will help you stay poised and determined for life’s many challenges. For more stories like this one, subscribe to Confident Money.

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The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

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