“What is a legacy? It's planting seeds in a garden you never get to see.” (Lin-Manuel Miranda)
Financial planning is mostly about thinking about how you want to live your life. But you shouldn’t neglect to consider what will happen after you are gone.
Estate planning is an important part of this. It is vital that you have an up-to-date will, that there is a safety net in place for your dependents, and that you have made sure that there will be enough cash in your estate to pay taxes and fees.
But it also shouldn’t stop there. If you really want to leave a legacy, just taking care of the cold financial facts is only part of the equation. Here are three important things to think about:
Even if you have had conversations with your family, writing things down in a letter can be an important point of reference to them after you are gone. This is sometimes referred to as an ethical will, although it is not a legal document.
The most critical component of leaving a legacy is involving your partner, children and even grandchildren in the discussion. Ideally, what’s in your will shouldn’t be a surprise to the people most affected by it.
Sitting down with your family and having an open and honest discussion about your values, your objectives for your wealth and how you want it to be used might sound difficult, but it can be extremely beneficial. Not only can it prevent heartache and even anger at a later stage, but you might find that your family has ideas you hadn’t thought of.
Knowing that your family understands your wishes, and is prepared for what will happen when you are no longer around, can bring significant peace of mind. Your financial adviser can also be invaluable in guiding this discussion.
Particularly in a country with so many needs, leaving something to a worthy cause is important to many South Africans. This should be approached with thought, and care.
Consider what is most important to you. This might be a charity, or a religious organisation. But it may also be ensuring that the children of your domestic workers can access quality schooling.
Again, discussing this with your family is the best way to ensure that your motivations are understood and your wishes are respected. It will also encourage them to continue to support your values into the future.
Making these preparations will help to make sure that your loved ones understand and appreciate your wishes. In this way, you will be leaving a real legacy, and not just rands and cents.
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