Leaving a Legacy

BLOGS|20 May 2022 |BY: Chris Sargent

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So far this year, our 2022 theme of Planning with Purpose, has covered topics like how to get your financial life organized and why it’s important that you think about the impact of taxes year round. Over the next few months we’re going to talk about the financial, investment, and retirement planning process BentOak Capital uses with the families we serve. But today we’re going to skip to the end and talk about your legacy.

Planning During Life

We talked a few times last year about the importance of estate and legacy planning. In a few weeks, we will be discussing these ideas in more depth during our Leaving A Legacy webinar. Facing the future is mentally and emotionally difficult for many people, but we believe this is a critically important topic.

Why is it important?

It’s proactive. When you pass away, the only thing you take with you is the clothes you’re buried in. Everything else you own, you should have a plan for. There are only three places your estate assets can go once you pass away: your family or other heirs, charity, and the government (generally in the form of estate taxes). If you want to choose which family members get particular parts or amounts of your estate, or if you want to benefit one or more charities, you must proactively plan for that.

You can ensure your wishes. If you do not have a will, you are letting your state government and the court system decide what happens to at least a portion of your possessions or other things you care about and have an interest in. If that’s the case, particularly if you are not married or if you have no children, you should at least be aware of what’s going to happen.

You provide clarity for heirs. Accounting for and legally dividing an estate between heirs is, at best, a time-consuming job, even when it’s not actively difficult dealing with courts, creditors, and heirs. The person who is responsible for making that happen, often a surviving spouse or child, has to go through this obtuse legal process while simultaneously grieving the loss of a loved one. Additionally, it is not a stretch to say that inheriting money can easily strain personal and familial relationships. Having a comprehensive estate plan and a legacy plan can help alleviate some of the stress faced by heirs.

How do you go about doing this?

Your estate plan. There are three ways for assets to get transferred from you to your heirs at your death. Some assets, such as real estate, pass as a matter of law. How an asset is titled (community property, jointly with survivorship, and in trust are just three of the many options) determines who receives the inherited property. Other assets are transferred according to a pre-determined beneficiary designation. IRAs, life insurance, annuities, and bank accounts marked POD (Payable on Death) are examples. Any asset that does not get passed to heirs through one of the other two manners will be transferred according to your state’s probate process. What that process looks like depends entirely on whether you have a legally valid will or not.

Your legacy plan. Distinct from the legal estate planning documents, legacy planning is the intentional, personal preparation of your heirs to receive their inheritance. In large part, this is a practical discussion of the emotions, logistics, expectations, and values around the family’s wealth. Multiple studies have shown that “a lack of communication among family members” is consistently one of the top two reasons for why extended families break apart following the death of the older generations. On the other hand, “intentionally passing along values to the next generation” is one of the reasons most often cited by cohesive families with multi-generational wealth. Where the estate plan covers the “what” and “how” of an inheritance, the legacy plan covers the “why”: why is family important, why did we end up where are, why are these values important to our family?

IMPORTANT DISCLOSURE INFORMATION: Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by BentOak Capital [“BentOak”]), or any non-investment related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. BentOak is neither a law firm, nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice. Moreover, you should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for personalized investment advice from BentOak. Please remember that it remains your responsibility to advise BentOak, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request at www.bentoakcapital.com/disclosure. The scope of the services to be provided depends upon the needs of the client and the terms of the engagement. Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results.  It should not be assumed that your account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your accounts; and, (3) a description of each comparative benchmark/index is available upon request. Please Note: Limitations: Neither rankings and/or recognitions by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any designation, certification, or license should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if BentOak is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers (see link as to participation criteria/methodology, to the extent applicable). Unless expressly indicated to the contrary, BentOak did not pay a fee to be included on any such ranking. No ranking or recognition should be construed as a current or past endorsement of BentOak by any of its clients.  ANY QUESTIONS: BentOak’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including the criteria used for any reflected ranking.

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