What to Leave

What to Leave: A Comprehensive Guide to Planning Your Legacy

I. Tangible Assets: Dividing the Material World

The most immediate aspect of what to leave involves your tangible possessions. These are the items with inherent physical value and emotional significance. Strategically planning their distribution is crucial to avoid disputes and ensure your wishes are honored.

• Real Estate: Your home, land, or other properties represent substantial wealth. Consider the tax implications of inheritance, the ongoing maintenance costs, and the desires of your beneficiaries. A will or trust specifying ownership transfer is paramount. Explore options like selling the property and dividing the proceeds, transferring ownership outright, or creating a life estate allowing someone to live there for a specified period. Joint ownership with rights of survivorship automatically transfers the property to the surviving owner.

• Financial Accounts: Bank accounts, investment portfolios, retirement funds (401(k), IRA), and brokerage accounts require meticulous planning. Designate beneficiaries for each account. This bypasses probate in many cases, ensuring quicker access to funds. Regularly review your beneficiary designations, especially after life-changing events like marriage, divorce, or the birth of a child. Consider a “Transfer on Death” (TOD) designation for brokerage accounts, which allows them to pass directly to beneficiaries without probate.

• Personal Property: This encompasses everything from furniture and jewelry to artwork, collectibles, and vehicles. Create a detailed inventory, noting the estimated value and your desired recipient for each item. While not legally binding like a will, a “Memorandum of Personal Property” can provide invaluable guidance to your executor. Family heirlooms and sentimental items often carry emotional weight. Facilitate open communication with your family to understand their desires and minimize potential conflicts. Appraise valuable items like antiques or jewelry to ensure accurate valuation for estate tax purposes.

• Business Interests: If you own a business, create a comprehensive succession plan. This outlines how the business will be managed and transferred upon your passing. Consider the skills and interests of your potential successors. Will they be capable of running the business? If not, explore options like selling the business or appointing a professional manager. Ensure your legal documents, such as partnership agreements or operating agreements, address ownership transfer in the event of death. Secure adequate life insurance to provide liquidity for the business or to buy out the interests of other partners.

II. Intangible Assets: Passing on the Invisible Wealth

Beyond physical possessions, your legacy extends to intangible assets that hold significant value.

• Intellectual Property: Copyrights, patents, trademarks, and trade secrets represent potentially valuable assets. Specify who will inherit these rights in your will or trust. Consider the ongoing management and monetization of these assets. Will your beneficiaries be able to effectively manage and exploit the intellectual property? Consult with an intellectual property attorney to ensure proper transfer of ownership.

• Digital Assets: In today’s digital age, online accounts, social media profiles, email addresses, and digital photos constitute a significant part of our lives. Designate a digital executor to manage these assets according to your wishes. Create a list of your online accounts, passwords, and instructions for accessing and managing them. Consider using a password manager with a “digital legacy” feature. Specify whether you want your social media profiles to be deactivated, memorialized, or managed by someone else.

• Life Insurance: Life insurance provides financial security for your loved ones. Determine the appropriate amount of coverage based on their financial needs, including debt repayment, education expenses, and living expenses. Review your life insurance policies regularly to ensure they adequately reflect your current circumstances. Consider creating an Irrevocable Life Insurance Trust (ILIT) to remove the life insurance proceeds from your taxable estate.

• Goodwill and Reputation: While not directly transferable, your reputation and goodwill within your community and industry can have a lasting impact. Consider how you want to be remembered and take steps to cultivate a positive legacy. Engage in philanthropic activities, mentor young professionals, and contribute to causes you believe in. Document your accomplishments and contributions to ensure they are remembered.

III. Values and Lessons: Leaving a Lasting Impact

Beyond material possessions, the values, lessons, and experiences you pass on are invaluable.

• Personal Stories and Memories: Capture your life story through writing, audio recordings, or video interviews. Share anecdotes, lessons learned, and reflections on your experiences. This creates a lasting connection with future generations. Consider creating a family history book or a digital archive of photos and videos.

• Values and Beliefs: Articulate your core values and beliefs. Share them with your family and friends. Explain why these values are important to you and how they have shaped your life. Consider writing a letter to your loved ones outlining your values and hopes for their future.

• Skills and Knowledge: Pass on your skills and knowledge to others. Mentor young people, teach a class, or share your expertise within your community. This ensures that your knowledge and expertise will continue to benefit others long after you are gone.

• Philanthropic Intentions: Clearly articulate your philanthropic intentions. Specify which charities or causes you want to support and the level of support you wish to provide. Consider creating a charitable trust or including charitable bequests in your will.

IV. Planning and Documentation: Securing Your Legacy

Careful planning and documentation are essential to ensuring your wishes are honored.

• Will: A will is a legal document that specifies how your assets will be distributed after your death. It allows you to name an executor to manage your estate and guardians for your minor children.

• Trust: A trust is a legal arrangement that allows you to transfer assets to a trustee, who manages them for the benefit of your beneficiaries. Trusts can provide greater flexibility and control over asset distribution than a will.

• Power of Attorney: A power of attorney allows you to appoint someone to act on your behalf if you become incapacitated. This can include financial decisions, healthcare decisions, or both.

• Advance Healthcare Directive (Living Will): An advance healthcare directive allows you to specify your wishes regarding medical treatment if you are unable to communicate them yourself. This can include end-of-life care decisions.

• Regular Review: Estate plans are not static documents. Regularly review your will, trust, and other legal documents to ensure they reflect your current circumstances and wishes. Major life events, such as marriage, divorce, the birth of a child, or the death of a beneficiary, should prompt a review.

By thoughtfully considering these aspects of what to leave, you can create a lasting legacy that reflects your values, provides for your loved ones, and ensures your wishes are honored. Seek professional guidance from legal and financial advisors to ensure your plans are comprehensive and legally sound.