Estate or Legacy Planning – Is There A Difference

Much has been written about the topic of legacy planning and there might very well be some confusion about the topic.

One of the objectives of a good Estate Plan is to determine (control) the allocation of your assets, now and into the future.  Some believe that the sole purpose of estate planning is to minimize present and future tax burdens, but that is only one of the issues of estate planning law.

An estate plan comprises the legal documents that form the eventual division and distribution of your assets, and can include healthcare decisions (medical power of attorney) and major financial decisions such as who would control assets if you are incapacitated.  A segment of estate planning also deals with guardianship of your minor children. ( For example: In the event of your death, who would assume responsibility for raising your children and what financial arrangements are available for them to take on that responsibility.) These issues are just the “tip of the iceberg” for a solid estate plan.

Legacy planning is another factor (if factor is the correct designation) of estate planning.  It is not separate from estate planning, but rather an extension of an estate plan.  Legacy planning comprises your estate plan and your “core values”.

What do you want future generations to accomplish by utilizing the assets of your legacy? e.g. philanthropy; corporate ethics; establishment of foundations; and not for profit endeavors? Too often we hear of situations where an estate quickly dwindles into insignificance after the death of the founder of that estate.  The successors to the estate did not understand how the assets were developed; how the assets were to be managed or did not share the values and outlook of the founder.

You do not have to be wealthy to think about legacy planning.  It is very much an extended and multi-generational approach to estate planning.  It answers the question: What do I wish my beneficiaries to focus on and to accomplish in the future with the assets that they have been bequeathed? Legacy planning also deals with the longer term financial objectives/issues of an estate, for example the tax burden of the beneficiaries.

Legacy planning is also very much focused on the continuity and caretaking of the estate.  To give a simplified example –part of your estate might be a vacation home or second residence.  Is the property to be sold? If so, how are the funds to be allocated? Is it to be used by the family? Who will share the burden of upkeep, maintenance, taxes, etc. and how will those expenses be distributed in the long term?  If one family member does not want the use of the vacation property, how will that impact the other beneficiaries? Is there another use for the property? Is that potential future use in harmony with the core values of the estate? The same scenario might be true of farmland, an art collection or other significant tangible property.

Legacy planning can also be frustrated in its goals.  An example is the legacy of Albert Barnes, The Barnes Collection, an extensive collection of art, now housed in Philadelphia.  Got to www.philanthropyroundtable.org for the entire story titled “Outsmarting Albert Barnes”.  It is not a short article, but well worth the time to read.  The legacy of Albert Barnes can be a cautionary tale for philanthropists as well as those planning their legacy.

For questions about estate planning issues, use the contact information below.  Please see my disclaimer notification at the end of this article and also the column “How I Can Help You”

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About Attorney Barbara Ann Dalvano

Attorney in Denver, Colorado with extensive practice experience in the areas of Estate Planning, Wills and Trusts, Business Succession Planning, Probate, Contract Law.

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