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Wealth Planning

Do you have a plan for assets that will outlast you?

Making deliberate choices now can help create the legacy you envision—and may avoid unintended consequences


People understand that they should organize their money with intent—but why is doing it such a different story? Many of us know what we should do, but that often conflicts with what we want to do. Think about this: Would you rather have a piece of cake or go on a run? It’s not even a close call.

Similarly, most of us know that we should prepare for the future. That includes making plans for assets that will endure beyond our lifetime. But it’s so much easier to focus on the present. Today’s temptations have a much greater pull than emotionally distant benefits in the future. Behavioral scientists refer to this phenomenon as “present bias.”

Research suggests that pre-committing to what we should be doing can restrain our natural impulse to do what we want to do in the moment—Default settings, early withdrawal penalties, automatic savings apps, a workout buddy, – these are all proven techniques to help us pre-commit. And that pre-commitment planning is what our “bucket” approach to goals-based advice is all about.

Previously we’ve explored two of the common buckets in a goals-based plan. In the liquidity bucket, you’ll want enough money to cover operating cash flow, near-term big ticket purchases and opportunistic investments. In the lifestyle bucket we recommend setting aside money to meet the spending needs that you and your family will have over your lifetime.

This third bucket, the legacy bucket, poses a particular challenge. That’s because it contains money for our heirs and beneficiaries—which we hope they’ll receive well into the future. When we plan for this bucket, none of our decisions have tangible, immediate consequences. Further, we know that we should make plans for beyond our lifetime, but most of us would rather not imagine a world without us.

How can we get past that natural hesitation and plan for the legacy we want to leave? This article provides a framework for thinking about these issues and a practical guide to getting where you want to go.


The power of intent in building a legacy

When you pass, you will leave behind a lot. Memories, meaning, business, personal and social impact and lessons and love for your friends, family and community. This is your legacy, often hard to measure, shape or control.

A big part of your legacy, however, is something more tangible and easier to control—a collection of assets. The money has to go to specific people, organizations or entities. If you do nothing, those assets will be transferred to others by default, often according to your local jurisdiction’s laws.

You can choose to be intentional, making deliberate choices based on your personal values and goals. You might divide your assets among beneficiaries who will receive your wealth upon your death. Or you could structure your wealth to be preserved and sustained across several generations beyond your lifetime.

It helps to think about the people who will receive the assets. Research shows that thinking about how our decisions affect others can motivate us to be more intentional.1 Identifying who you want to benefit from your assets—think of it as a gift—can be a constructive starting point for taking action.

So here you are. You have accumulated a significant store of assets that you want to give away. Before jumping into all of the details, try to picture the future in as much detail as you can. Consider it an opportunity to take control, shape the future and create your legacy. What impact do you want your assets to have on your family and community? In an ideal world, how does the future unfold?

Questions to ask: Who, what, when, how?

With that in mind, now you can flesh out the details. Here are four questions to ask yourself:

  1. Who is the money meant for?
    Your spouse, partner, children, grandchildren, future generations? A community-based organization or philanthropy? A few or all of these?

    Specifically when it comes to leaving assets to children, some people feel that it will be empowering for their children to receive all, or part of their accumulated wealth. Others feel that inheriting significant wealth would actually disempower their children. So identifying who will receive your assets is a critical first step. 

  2. What exactly are you giving?
    You might have a mix of belongings, investments, real estate and businesses. What are they worth now and what might they be worth in the future? What portion of your assets do you want divided among beneficiaries upon your death and what portion of your assets (a property or business, perhaps) might you want to preserve for multiple generations?

    For any treasured possessions that are difficult to literally divide, such as a watch inherited from your father or a piece of art passed down through multiple generations, you’ll need to consider how you communicate your decisions to those receiving these items and—perhaps more importantly—those not receiving them.

  3. When do you want to make your gift?
    Will it be during or after your lifetime? When will the gift begin and when will it end? For example, will there be many distributions to people over a long period of time, or one distribution at a single time (say, when you pass or when the beneficiary reaches a certain age?). Would you enjoy giving during your lifetime so you can see your beneficiaries put the assets to use?  

  4. How should you make your gift to most faithfully reflect your intentions?
    For example, do you distribute your wealth equally among your children, or do you choose a different division that you believe will be more appropriate? For many families, fair is not always equal. Other factors such as psychological readiness, financial need and contribution to the family play a large role in perceived fairness in how assets are divided. 

A legacy-planning checklist

To make your vision a reality, you’ll need to work with your financial, tax and legal advisors. The best-laid plans can be disrupted when important details are overlooked. Here are some tips to consider:

  • Remember to update your asset titling and beneficiary designations so that assets pass to the intended recipient or entity. Also of critical importance—ensure you have an up-to-date will.
  • If you plan for any of your assets to remain in trust, carefully think about whom you name as trustee. Will naming a family member spark conflict? Will that person live long enough to handle the responsibilities? Consider naming a corporate trustee or co-trustee to facilitate continuity through generations and objective administration of your trust’s terms.
  • The timeline and priority level of your gift should dictate how the assets are invested. Generally speaking, the longer the time horizon, the more risk and less liquidity the assets can afford.
  • Communicating expectations, intentions and distribution policies to beneficiaries before distributions are made can go a long way toward engendering a sense of fairness. For example, you may want to have a prenuptial agreement policy or requirements for funds to be disbursed for education expenses.
  • Finally, keep the beneficiaries in mind. Do they have the required skills to use the assets in accordance with your intentions? Your J.P. Morgan team can help with financial and wealth literacy. Starting education early to give them the longest runway possible is a prudent approach. Further, consider writing a Letter of Wishes to give context to legal structures and decisions. 

Final thoughts

Do you find it hard to think about your legacy? Join the club—the hesitation is entirely natural. Take a deep breath. Then envision your legacy bucket through the lens of who, what, when and how. By thinking about the specifics of your imagined future, and using our four-part framework you can plan for the legacy you want to leave your heirs and beneficiaries.





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