Blogs > Your Money

Dave Patterson and Erin Preston, a father-daughter team of Certified Financial Planner® licensees, provide thoughts and suggestions on a broad collection of personal finance topics.  Information provided in this BLOG is intended to be of a general nature and may not be appropriate for all situations.  Readers should consult with their own financial advisors before relying on any information contained herein.

Tuesday, June 29, 2010

A “Living Legacy” May Be Better

A recent article in Money Magazine titled “Leaving a Legacy on a Shoestring” by Dan Kadlec, April 2010, got us to thinking about inheritances in general. The gist of the article was that with the recent economic downturn and market meltdown has left quite a few retirees with little to no excess funds to potentially leave to their beneficiaries. The article provides several ways that those strapped for funds can still leave a legacy.

Suggestions included:

(1) Buy a life insurance policy payable to your beneficiaries.
(2) Convert part of an IRA to a Roth IRA, if you can dedicate a portion to your
(3) Prepay for a financial planner to work with your children and/or
grandchildren to help them better manage their finances.

The article also quoted a study by the life insurer Allianz regarding the type of bequest that made a lasting legacy. Only 10% of those surveyed felt that financial assets made a lasting legacy. It’s sort of like surveys that show that a pay raise has little lasting affect in motivating an individual, since they had long felt they deserved it. Thirty-four percent of those surveyed felt that possessions of emotional value provide a lasting legacy and 77% felt values and life lessons provided the most meaningful bequest.

We tend to agree with the Allianz survey but believe there is a broader approach that may be even more meaningful to your heirs. We call it leaving a “living legacy”. Our concept of a “living legacy” includes the values, life lessons and possessions of emotional value. We believe it best to make the legacy “living”, by giving of your time and some of the possessions of emotional value while you are still living, so you can see your heirs receive enjoyment.

A “living legacy” includes helping your children in a myriad of ways:

- Help them with their down payment on that new house.
- Teach your children or grandchildren how to make your famous pie or refinish
a piece of antique furniture – transfer your strengths and hobbies to them.
- Help them get their new house ready for move-in or help them decorate their
current residence.
- Help foot the bill for a family trip to Disney or an all-inclusive resort.
- Use your seasoned skills to help them with home or car repairs.
- Baby sit so one parent can work part-time or take care of the grandchildren
so mom and dad can get a well-deserved getaway.

These are but a few ideas of what retirees can do to create a legacy for their children and grandchildren while they are alive and can enjoy seeing their gifts and help appreciated. We believe that these types of “living” bequests will be appreciated and remembered far more than a lump sum of cash after you’re gone.


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