Many people would like to leave a mark on the world, whether large or small, in the form of their legacy. Whatever your passions in life–from philanthropy to family–your legacy should reflect these passions. At its core, a legacy is built on your personal values and how you choose to share those values to make an impact on the world. Your legacy also comprises your experiences as a person. Sharing your memories, stories, and perspectives with family members can connect them to your values and familial history.

Furthermore, a legacy isn’t just what’s left behind when you’re gone; it can be a part of creating a purposeful and satisfying life for yourself, and your family, in the present. Comprehensive legacy planning allows you to not only transfer wealth but to intentionally pass down values, memories, and traditions. In this piece, we discuss the importance of consciously creating a legacy based on your values and show you some steps to help you get started.

For tips on documenting your family’s history, visit our article “Getting Started on a Family History Project.”

Create a Legacy as an Act of Love and Generosity

Each of us will leave a legacy, whether we plan for it or not. Creating an intentional legacy is part of living a deliberate, purposeful life and having a clear vision for the future that will effect change and inspire our families. “To create a legacy is to think beyond yourself and to think about the people you love. It’s intentional encouragement to the next generation to live a generous, purposeful life,” says Tracy Gary, philanthropist and author of Inspired Philanthropy: Your Step-by-Step Guide to Creating a Giving Plan and Leaving a Legacy.

If philanthropy is important to you, creating a strategic giving plan can help you align your gifts with your vision and values as well as increase the effectiveness of your gifts. In order to become a more engaged donor, Gary advocates moving away from “obligatory giving” to “transformative giving.” She defines obligatory giving as reactive giving in response to appeals, pledges, and social commitments. In contrast, transformative giving emphasizes philanthropy that supports your values and seeks to make the greatest change in the causes you care about.

Though some may think of inspired giving as beyond their reach, Gary counters that “[it] isn’t about how much money you have to give. It’s about being intentional and aligning it with your values and what the community needs.” By using your values to guide your philanthropy, you can be more strategic about what results you would like to see in your community and work toward that change.

Identify Your Values and Explore Meaningful Priorities

Just as creating a financial road map begins with discovering and prioritizing financial goals, an intentional legacy requires you to explore your core values and passions. In making your legacy plan, be intentional about what’s important to you and what’s worth supporting with your time, talents, and wealth.

Once you’ve covered your basic financial needs, you can move on to considering the mark you want to leave on the world. The first place to start when thinking about a legacy is to answer a deceptively simple question: What gives my life purpose? Discovering what inspires and excites you will lead you to ideas for incorporating your passions into your legacy.

For many Americans, charitable giving and volunteerism are key parts of their personal identities. These forms of philanthropy encourage you to engage with your values, your families, and your community. Look at the causes you already support and see what they have in common. Consider whether focusing your philanthropy might best support your values and strategically build your legacy. Use these passions and values to create a vision for the impact you would like to have in your community and family.

Being intentional about how to express your values can lead to new possibilities in your legacy strategy. For example, Gary suggests creating gifts for specific uses, such as a “Fun Fund” for your children and grandchildren to spend on travel and little luxuries. This way of earmarking gifts can guide your inheritors toward pursuing the experiences that you would like to give them. Such planning can help you feel reassured by knowing that the people and causes you care about will be supported by your wishes.

Use Your Legacy to Build Bridges Between Generations

Most families find it difficult to talk about money, especially when it comes to potential inheritance. While parents and grandparents may worry that talking about wealth may breed dependence or sabotage their children’s independence, research suggests that frank conversations about money are critical to your family’s long-term financial health.

When Gary received her inheritance in her twenties, she understood that she was expected to give the money back to the community through entrepreneurship or philanthropy. Rather than become dependent on family wealth, she used it to become a passionate philanthropist, author, and mentor to wealthy inheritors around the country.

There’s no right or wrong time to speak to your family about money, but our opinion is that sooner is better than later. Gary recommends letting children know as early as possible what and how they might expect to inherit. She says: “It’s important to be candid and forthright because you don’t want to undermine their ambitions or give them the illusion that they will inherit a lot of money.” She strongly believes in setting expectations for future inheritors through conversations about legacy plans and is grateful to her parents for being upfront about their expectations.

One means of opening a conversation about inheritance and legacy is through the discussion of what change you can make in the world as a family. Furthermore, engaging in philanthropy as a family activity can help you communicate your values and expectations around money. Gary suggests, “Families can use philanthropy as a way to learn about each other and build respect for each others’ values and passions in life.”

Is Giving a Value in Your Family?

76% of charitable donors learned about giving from their parents

94% of donors are teaching their own children to give

65% of donors say that they discussed giving plans, charity selection, and philanthropic planning with their families at least twice in the last year

39% of donors make charitable decisions with input from family members

Research suggests that the best way to pass down philanthropic values is to explicitly discuss charitable giving with your children. A 2013 study found that conversations about philanthropy had a greater impact on charitable giving among children than role modeling alone. The study also found that talking to your children about charitable giving increases the likelihood that they will give to charity by 20%. If financially supporting a valued cause is something you would like to continue as a part of your legacy, consider bringing your family along to charitable events or fostering discussions around the issues that are important to you. By engaging your family, you may be able to amplify your impact and inspire them to appreciate and support the good work of your cherished causes.

Speak to a Financial Advisor about Your Legacy

As financial professionals, it’s part of our duty to understand your values and priorities in life. Our goal is to help you achieve the financial freedom to think about higher priorities, and we want to do our part to help you explore your motivations and create a more purposeful life.

One of the main reasons that we encourage you to involve us in your legacy goals is that we can help you incorporate these objectives into your financial strategies. Whether you wish to make annual gifts to charitable causes or want to leave a substantial inheritance to your children, we can help you put your legacy into action.

If philanthropy is one of your goals, making charitable giving an explicit part of your financial strategies can create opportunities for tax savings that may then increase the amount of money you can donate to valued causes.

We can also help you connect with your loved ones about your legacy. We strongly recommend including spouses, children, and other close family members in the legacy-planning process. On a practical level, introducing them to your financial professional can help smooth the transfer of wealth and ensure that they have the financial advice they need. On a more fundamental level, actively including your family in your legacy decisions can help build stronger relationships and communicate your values around money. We can help you involve your loved ones by hosting family meetings or mediating family discussions.

If you would like support during your journey towards a more purposeful legacy, we would be delighted to help you:

Explore your values and create a family mission statement;
Develop your personal legacy and a vision for your family’s future;
Meet with loved ones to discuss your goals;
Identify the right structure for your giving and create a philanthropic strategy that fits your needs;
Understand how planned giving can fit into your existing financial strategies.

In our experience, one of the greatest benefits of working with professionals is the confidence of knowing that you have a team of caring experts on your side. We enjoy working with clients to define their personal values and create lasting legacies for their loved ones and the causes they care about.

Sources:

Ameriprise Financial (2012). Money Across Generations II SM Study: Family First. http://newsroom.ameriprise.com/images/20018/MAG%20Research%20Report%20Family%20First%204-27-12.pdf
New Research on Charitable Giving by Girls and Boys. (2013). Women Give 2013. http://www.philanthropy.iupui.edu/research-bycategory/women-give-2013

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The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.

Published on October 25, 2017 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.