Updated: Nov 14, 2018
I recently reviewed my estate & legacy planning…
I like to think of myself as a simple guy. I go to work, earn a living, have some fun, repeat. I don’t see anything complicated about the way I live- then why shouldn’t it be just as simple once I am gone?
While I momentarily enjoy the cut and dry simplicity of the thought, my inner planning neurosis disapproves. Butting its nosy head in it reminds me why I was drawn to this profession- the belief a little forethought enhances results. It points out that the things I’ve done, and the people in my life- layers of legacy planning complexities in and of themselves.
Well there goes my simple legacy plan.
As I think further I realize- what WOULD everyone do without me?
While I find this a funny way to jab at my own feelings of self-importance, all joking aside, in my 55 years on earth there are some people who depend on my being around. Plus, all this stuff I’ve accumulated, the things I’ve built, it took quite the journey.
When I put this kind of thought into it I realize, I want to decide how it all works out in the end. Do a little bit of planning to gain a little bit control from above with my final “Legacy.”
So, how do you “Control from Heaven”?
The first part is simple, you make a list of what you are working with.
Life Insurance (does it properly fill holes?)
Assessing my own situation, I make a list that spans from from retirement funds to my father’s gold chain. But what about my intellectual assets? My values, life lessons, stories?
I include those thoughts, complete my list, CHECK. First part done.
Next, what sort of “controls” do you want to put in place?
This step is far more mind boggling than the last. Each asset may have a completely different thought process.
Take the cash/investment sort into consideration for a second-
Maybe I have it paid out over years, that way I can stretch my legacy?
But what if there’s emergency or a fantastic opportunity and they need it all at once?
What if it’s a silly opportunity? Maybe I could create restrictions…
Or real estate-
What about putting the vacation spot in a trust so they don’t sell it, and could all enjoy?
But what if one moves away and would need the funds?
Ugh. Maybe I just forget these specifics and just put someone in charge of figuring it all out… but what if this alienates that person from others by making them the de-facto “boss?”
This is just the beginning of a flood-like rabbit-hole of thoughts to come. It’s a complicated conversation with yourself- benefit vs. complications and even ego vs. reality.
To make it easy, I’d start out with a list.
Your potential heirs, and a SWOT analysis. Strengths, Weaknesses, Opportunities, Threats. (Do not under any circumstance allow them to find this!) Doing this can help you prioritize what sort of “controls” are necessary.
Does the job-wanderer or free spirit need the same control as the heir with a drug issue?
Are there concerns about money flowing properly to grandchildren?
Concerns about divorce or lawsuits or creditors?
How would money effect these people?
How would limiting their access to money affect each of them?
Once you have your list, analyze your intentions.
Think about what you really want to do.
Preserve capital for your values?
Or set someone down a path until they have got on the right track?
Make a final list of those goals.
With clarity and well-thought goals, commence to the final step.
Bake your Controls into your Plan
There’s a myriad of ways to do this, and this is where a professional can help. They know many ways to match your intention to plan.
It can also be quite simple. Maybe it’s just a letter or memo you leave to your family describing your intentions, without any binding effect. Your intentions and trust they’d follow through might be enough.
If it’s not- maybe the solution is beneficiary designations, set in a way to restrict certain assets or distributions.
Perhaps it progresses to the need of a trust, with layers of control. Trusts can restrict actions, have protections, be phased in nature or have clauses that change if the beneficiaries’ actions change.
The limits are purely on creativity, and of course the basic rights we are afforded in this country. I’d encourage you to imagine what sort of needs are there for your loved ones when you are gone.
After reading through all of this, before starting to do this for yourself there’s one thing you should accept. In the end- control is really an illusion.
Your estate is probably not going to make your kids hard-workers, or more responsible. It’s not going to stop your daughter from dating so-and-so or make your niece happy to go to your alma matter.
Be practical. Honest with yourself.
To be honest with you- your intentions can be disregarded. Despite repercussions. It’s happened before.
Does this make it all pointless? No. The way I think of it is, my plans are meant to nurture and protect my legacy and my family. I feel good about that.