You may be wondering why is legacy planning important, particularly if you are satisfied with the way life has turned out for you. Yet, as they say, you should stay in the present but keep one eye on the future at least. In this case, with a partner, children, and other family members, it is important to secure their financial futures from the outset. How do you do this? Legacy planning is the best way to set up a proper mechanism in place for this purpose. Here’s an understanding of how vital it actually is.
Why Legacy Planning Matters
Why is legacy planning important? Here are a few compelling reasons:
- A well-settled financial legacy or estate concretizes what you leave behind to your children and family members.
- It safeguards them from future financial worries, enabling them to lead their lives with dignity.
- It helps them meet future goals and achieve their dreams without any compromises.
- It ensures suitable clarity on the division and transfer of assets, helping to avoid future disputes among family members.
- Not all family members may have the financial acumen or sense of responsibility to manage everything properly. Hence, legacy planning organizes everything into a structure that they can understand.
- You will gain greater peace of mind, knowing that your loved ones will be financially secure in their lifetime.
Some Legacy Planning Tips
Now that you know why legacy planning matters, here are a few tips that are worth considering.
- Create your will- You should make a will at the earliest (if you haven’t already), specifying the distribution of your estate/assets among family members, other loved ones, charities, causes, and so on. You can modify your will later on if you wish. This is the first step towards leaving behind an estate.
- Creating a trust—If you are not confident about your children or heirs managing their inheritance properly, create a trust for your estate. Have legal provisions in place so that they receive money for their needs without spending it irresponsibly.
- Protecting minor children- A trusted legal guardian may be appointed to manage your estate and protect your minor child’s interests until he/she comes of age.
- Getting adequate insurance- The first addition to your portfolio should be a life insurance plan with adequate coverage. This will safeguard your family’s financial future in the event of your demise.
- Make strategic investments—Deploy your money into smart investments like ULIPs and a mix of other high, moderate, and low-risk options to build a sizable corpus for the future.
These are a few steps that you can take in order to ensure a proper financial legacy for your family. Do not neglect the importance of legacy planning since it will be the cushion for your family when you are not around. It will help them live comfortably without compromising on their living standards and future goals.
