What Is Legacy Planning?

First Service Credit Union
8/1/2018 12:00:00 AM - 7 min. read

Legacy planning is all about creating a definitive plan for managing your total wealth — both today and tomorrow. It goes beyond the standard financial planning and encourages individuals to take a holistic look at their life, their legacy, and their estate. More than just a retirement strategy, legacy planning is about building the type of wealth that will provide for your family long after you’re gone.

When done correctly, a legacy plan will allow you to provide for your current financial needs, pass wealth to loved ones after you are gone, and help you leave a legacy that aligns with your values, morals, and faith. The plan demonstrates your priorities in how your finances are distributed and helps to craft a family story that helps pass along your values for generations to come.


Different Facets of Legacy Planning

Because legacy planning considers more than money, real estate, and other assets, developing your plan can be complicated. Here are a few things to consider when working with an experienced financial professional to build out your legacy plan:

  • Building and growing your current wealth
  • Minimizing taxes and legal fees
  • Giving to charities or other organizations that align with your values
  • Utilizing estate planning tools to share your wealth with your loved ones
  • Instructions on communicating your values (religious, educational, charitable, etc.) to family members in addition to your assets
First Service Financial Guidance Tips Icon

Pro-Tip: Do not confuse Legacy Planning with Estate Planning. Estate planning does also espouse the idea of long-term financial management, but legacy planning is a more comprehensive strategy that tries to incorporate a deeper sense of purpose and philanthropy into a person’s final financial wishes.


Key Elements of any Legacy Plan

Different financial and estate advisors will have their own unique approach to legacy planning. However, most legacy plans will include the following common elements:

Your Will

A person’s last will and testament, or “Will” for short, is a legally binding document that outlines their wishes upon death. Your Will should outline how you want your assets to be distributed when you die and may also name an executor or manager of your estate.


A trust functions similarly to a Will, but the main difference is that a Trust can be executed upon while its namesake is still living. Technically, a Trust may become effective as soon as it is formed, meaning it can help provide loved ones with access to assets during your lifetime while still managing to avoid probate.

Life Insurance

For many families, life insurance plays a vital role in securing their financial future. This type of insurance can help provide tax benefits for retirement and can give an influx of cash to pay for unexpected expenses at the time of your passing.

Long-Term Care Insurance

Providing long-term care for a family member can be a huge financial and psychological burden. Planning ahead for this possibility with proper insurance planning will help limit the stress placed on your loved ones in the event that long-term professional care is needed.

Retirement Planning

Your legacy plans should take into account your current and future retirement planning strategy. These plans could affect your overall approach and timeline, so work closely with your financial advisor to make sure your strategies are working in conjunction with each other.

Your Values and Beliefs

Regardless of what you may believe, your legacy plan should reflect that. There are legal tools that can ensure your values and priorities are passed along how you see fit. For many people, this includes a clear plan on when and how to give back to organizations, charities, and causes that are near to your heart. This is a crucial way to contribute to the building of your future legacy.


Benefits of Having a Legacy Plan

Because it is so comprehensive, legacy planning is not always easy. However, it is worth it. When you take the time to plan, you will realize many benefits, including:

  • Increase your financial security
  • Decrease potential taxes
  • Reduce complications after your passing
  • Provide greater stability
  • Create less stress
  • Eliminate ambiguity
  • Protect your family from difficult decisions
  • Support your goals and values
  • Ensure your wealth is passed along in a way you want


5 Tips for Getting Started with Your Legacy Plan

If you are considering starting your own legacy plan, there are a few important steps that should help you begin the process. We've outlined a few critical steps below for getting a head start on your legacy plan.

Step 1: Create Your Financial Overview

The first step for creating your legacy plan will require some legwork on your part. You have to take stock of your current financial situation. You need to make sure you have a clear and up-to-date understanding of things like your income, debts, and assets. Write everything down and be sure to include things like retirement accounts, savings, homes, vehicles, and any other assets you currently own. On the flip side, be sure to account for any debts, liabilities, or other financial obligations you will need to consider when planning for your future.

Step 2: Determine What You Want Your Legacy to Be

Remember, legacy planning is about more than finances. Your plan should emphasize certain values and clearly explain how you’d like those to be passed down to future generations. In order for a financial or estate planner to help you accomplish your legacy goals, they will need to have a clear understanding of what that will be. Consider things such as religious or educational values you want to support long-term and be sure to include those in future legacy planning discussions.

Step 3: Designate Someone You Trust

One of the most critical aspects of legacy planning is determining how your wealth will be passed down and managed when you are gone. You will need to take steps to assign beneficiaries, powers of attorney, and other guardians who you will trust to manage your estate and carry out your final wishes.

Step 4: Find the Right Partner(s)

If you’re doing legacy planning the right way, you won’t be doing it alone. We recommend finding a skilled financial professional with a proven track record to can help guide the process and ensure everything is in order legally for you to move forward with your plans. When preparing, you may even consider putting together a team of trusted people that may include attorneys, insurance professionals, financial planners, and other experts that can give you advice along the way.

First Service Financial Guidance Tips Icon

Pro-Tip: No matter if you’re working with one person or 10, it’s important than you do have one key figure who knows you and understands your goals. Be willing to choose at least one financial professional to whom you can commit to dedicating some time. It is imperative that this person truly has a sense of what you want to accomplish.

Step 5: Review and Adapt Regularly

As long as you’re alive, you should consider your legacy plan a fluid strategy. Remember, the plan should reflect your values as well as your finances, so it’s perfectly normal to review your plan and make adjustments periodically. Don’t fall into the trap of “set it and forget it.” People change constantly, so as you learn and grow, make sure that your legacy plan continues to reflect what matters most to you.


Additional Considerations when Building Your Legacy Plan

As your plan comes together and the necessary paperwork is being completed, it’s important to keep a few things in mind along the way. Here are some of the main considerations you’ll want to remember as you build your plan:

Retaining Access to Your Money

Chances are you will want to maintain a certain level of liquidity with your investments to have easy access when you need it. For these instances, consider taking advantage of a high yield checking account50 or money market account9 . Both offer higher interest rates compared to a traditional savings account and give you the flexibility to pay for unexpected bills and expenses directly from your accounts.

Communicate with Your Loved Ones

Legacy planning often focuses on family. If that is true for you, then be sure to keep them involved and up to date with your planning to avoid any surprises later on. Communicating clearly and often will help ensure that your plans are carried out how you desire even after you are gone.

Organize Your Documents and Store Them Securely

Because legacy planning requires many documents, there is a lot of sensitive information that is laid bare. The importance of keeping this protected cannot be overstated. However, it is also vital that you store your documents in a safe place that can be accessed by your beneficiaries, attorney, or financial partner if needed. Documents you may want to consider storing include:

  • Financial institution and other account details
  • Final arrangements and instructions
  • Funeral prepayment plans
  • Insurance policies
  • Real estate deeds
  • Safe and deposit box information
  • Stocks, bonds, and annuities
  • Trusts
  • Vehicle titles
  • Your last will and testament


Exclusive Tips from First Service Wealth Management

Getting started can be challenging. To help point readers in the right direction, we sat down with veteran financial professional, Michael Alexander, to discuss his thoughts on legacy planning. Michael is a seasoned representative with First Service Wealth Management, available through CUSO Financial Services, Inc., who has been helping families reach their financial goals for 30 years. Because of his vast hands-on experience, we believe this can serve as a great resource for anyone looking to start creating their legacy plan111 .

First Service Wealth Management Professional Michael Alexander

Q: How Does Someone Create a Will?

Michael's Response: In Texas, a person may handwrite a will; however, I strongly recommend using a legal service. Some legal offices offer services online, while others will meet with you in person. I normally recommend four key documents be signed: a will, a durable power of attorney for financial matters, a durable power of attorney for health matters, and a living will. I strongly recommend talking to an attorney specializing in wills to get answers to all your questions about wills, powers of attorney, and living wills.

Q: How Much Life Insurance Should a Person Purchase and What Kind?

Michael's Response: There is a broad range of opinions on this subject. I normally recommend no less than five times your annual income, including group term insurance available through work. I also recommend getting as much of that available through work, but not all of it. With frequent job changes today, once out of a job, you are also out of your group term coverage. This will allow your loved ones to continue a comfortable lifestyle after you're gone. And don't overlook the stay-at-home or underinsured spouse — I always recommend reviewing your life insurance needs for spouses and children.

Q: What’s a Trust and Who Needs One?

Michael's Response: Normally trusts are recommended for three reasons: privacy, minimizing estate taxes, and ensuring the assets are distributed how you want.

Trusts are essential for those with high net worth estates. Combined gross estate, assets in excess of $5,490,000 are subject to estate taxes. Putting assets in a trust at least five years before death may help abate some of that tax. I strongly encourage seeking an estate-planning attorney to get answers to all trust questions.

Q: If Someone Doesn’t Have Many Assets, Do They Need to Create a Legacy Plan?

Michael's Response: Yes. By having a plan, you can ensure that your assets, whether big or small, go exactly where you intend for them to go after your death. A legacy plan can consist simply of your will and investments or savings.

Q: How Can a Person Make Sure Their Legacy Plan Is Carried out when They’re Gone?

Michael's Response: Legacy planning elements are legally binding documents that must be carried out as documented. However, they cannot be executed unless someone knows where to find them. Once you've created a will, purchased life insurance, and taken care of the other legal documents, be sure to let your spouse and a close family member know where your documents are located. Always keep them in a safe area.

Q: What Other Advice Do You Have for Someone Creating a Legacy Plan?

Michael's Response: It's essential to bear in mind your current financial needs when legacy planning. Make sure you have enough to live on — that should be your priority. Also, rely on your financial advisor to be your trusted resource guide for legacy planning. They should be able to point you in the right direction for legal and tax professionals, as well.


Still Have Questions about Creating Your Legacy Plan?

No matter where you are in the legacy planning process, the First Service Wealth Management team can help. We offer a wide variety of investment services that can help you save for your future and start to build your legacy now. Start by completing the form below to speak with an experienced wealth management professional and rest easy knowing that you are on track to leave a legacy you can be proud of.


( ) -

[50] High Yield Checking - Dividends: APY = Annual Percentage Yield. APYs and terms are accurate as of 5/1/2023 and may change after account is opened. Higher dividends are paid each month when the following monthly requirements are met: must have at least one direct deposit with a minimum of $500 and have at least 12 debit card purchases. A monthly fee of $4.95 will be assessed if the monthly qualifications are not met or an average daily balance of at least $1,000 is not maintained. Fees may reduce earnings.

[9] Money Market - Dividends: APY = Annual Percentage Yield. APYs are accurate as of 5/1/2023 and subject to change. Fees may reduce earnings.

[111] Non-Deposit Investment Products: Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CUSO Financial")(“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor.  Products offered through CUSO Financial: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CUSO Financial. The Credit Union has contracted with CUSO Financial to make non-deposit investment products and services available to credit union members. Atria Wealth Solutions, Inc. (“Atria”) is not a Registered Investment Advisor or broker-dealer. Investment products, services and advice are only provided through CUSO Financial, a subsidiary of Atria.