What is a Legacy? Part One

Ian King, Monday September 2, 2013

Central to the concept of The Family Legacy SolutionTM is of course the idea of “legacy”. Well what does this mean?

The standard dictionary definition of a “legacy” is firstly “an amount of money or property left to someone in a Will”.  A further and perhaps somewhat more intriguing definition follows “something left or handed down by a predecessor”.

Most frequently, the term “legacy” is specifically thought of as a financial matter, i.e. in accordance with the first definition.  As the second definition alludes to, a legacy is however much more than the transfer of financial resources, a matter I hope to discover more of in this post and in those that will follow.

Financial plan

As a Chartered Financial Planner I am often tasked to help people leave a financial legacy to others, often to their children or grandchildren.  Whilst such an endeavour is closely wrapped up in investment, tax and legal expertise, what frequently fascinates me is the impact that such a legacy could have, primarily to the beneficiaries but also to those people around them.

When a financial plan is effectively implemented this can mean that funds are delivered to the next generation in a quick and efficient manner.  But should a planner’s role be solely limited to achieving this goal?  I believe not.

A financial legacy from, say, a parent to a child can alter the life of the child dramatically.  The financial bounty can help to repay a mortgage, fund retirement or ultimately can lead to financial independence and a degree of freedom for the beneficiary which would not otherwise have been possible.  Such a transfer of financial resources can also be a curse.

Long-term impact

When discussing with my clients, a legacy that they would like to leave, I often ask them what the long-term impact would be upon their beneficiaries if they (and their spouse/partner) died tomorrow? If you took the value of all of the property, cash, pensions, businesses, investments, life policy proceeds and dumped it on your children, how would their lives be changed? Would it be positive or would it become a burden?

What would be your answer?

Answers I frequently hear, would be concerned with the impact such a windfall would have upon the child’s attitude towards money, work and material possessions and how the personal relationships, particularly with the child’s spouse/partner, could be impacted by such a life changing amount.

Remember – the financial legacy does not need to be in the multi-millions, a bequest of just a few thousands of pounds can have a profound impact.

Making a difference

One of the key motivations as to why I created The Family Legacy SolutionTM was to make the maximum positive impact upon the legacies which are left within families.  Many people whom I meet have not even considered such matters, never mind discussed them with even their spouse/partner or children.  This is all in the face of one undeniable fact – we will all at some point depart this mortal coil.

We work closely together with our clients to specify the barriers which clients may have, to leaving a legacy which they deserve.  This is how I believe myself and my team can make a difference to the lives of the people whom we serve.

I will be looking in forthcoming posts in more aspects of legacy planning which lie beyond the financial but as always I welcome any comments, feedback or further points for discussion.

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