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Legacy planning is a financial strategy that involves bequeathing your assets to your loved ones after your death. Besides tangible properties, it allows you to pass down beliefs or important family values to your beneficiaries. There are many reasons why creating a legacy plan is crucial before a person’s passing. Here are some of them:
Ensures Proper Inheritance of Assets
One of the major advantages of legacy planning is you’ll be able to distribute your estate to your loved ones as you wish. Without a clear legacy plan upon your passing, your valuable properties may go to unintended beneficiaries. This can be troublesome, especially if you have major assets like a family business, real estate, or various investments.
Helps Avoid Any Family Discord
Besides ensuring the right people inherit your assets, legacy planning also helps avoid disagreements within the family. Since you have a clear plan on the beneficiaries of important heirlooms and properties, the family you’ll leave behind won’t have to deal with potential conflicts concerning inheritance.
You may also designate who will have full control over your assets if you become incapacitated. Aside from ensuring your wishes will still be carried out, they will also help protect your estate.
Protects Your Family From Large Tax Burdens
Inheriting money or property also involves taxes that the inheritors must pay. So, proper planning is crucial to ensure your beneficiaries receive the maximum value of the assets you leave behind.
Possible hidden assets like annuities and trusts are taxable, and they can increase the amount of money your beneficiaries need to pay. With proper legacy planning, you can effectively reduce these costs and protect your family from excessive financial burdens.
Keeps Your Values Secured
Legacy planning also helps protect your values in building wealth. If you’re worried that your family will stop working hard or staying motivated because of a financial windfall, a legacy plan will assist you. You can control how your money will be shared by creating trusts, nest eggs, and allowances.
Consult a Financial Advisor Near You
Learning about the importance of legacy planning will help you understand why you should start the process as soon as possible. While you can begin gathering necessary information and documents on your own, reaching out to an expert is most beneficial. Contact our financial advisors at LoneStar Wealth Management in Lubbock, TX for more information about a personalized legacy plan.